US FX WRAP: Dollar sees modest strength with NOK, GBP, & AUD lagging

Analysis details (20:31)

The Dollar eked out modest gains against G10 peers as the US government shutdown entered its second day. The usual weekly claims report was absent amid the shutdown, leaving Challenger layoffs the highlight, with layoffs easing to 54k from 86k in September. Also helpful in gauging labour developments, given that NFP won't be released on Friday, was the Chicago Fed estimate on the unemployment rate, which stood firm at 4.3% from the initial September 23rd reading. From the Fed, Logan (2026 voter) maintained her hawk stance seen earlier in the week, with Goolsbee (2025 voter) again highlighting concerns over inflation. DXY rose to ~ 97.83 from earlier 97.52 lows.

G10 FX moved lower on Thursday, led by NOK's reversal of Wednesday's outperformance, with AUD and GBP also experiencing modest pressure. NZD outperformed. Similar to the US, Newsflow/data was generally light in the space. Overnight, the Yen was temporarily supported by BoJ's Uchida, who noted the Tankan survey showed positive business sentiment as the US tariff outlook recedes; BoJ to raise rates if the economic outlook is realised. On trade, updates concerned the EU, with further reports pointing towards the EU hiking steel import tariffs to 50%, according to a draft seen by Bloomberg. Additionally, the US is considering easing tariffs on Scotch whisky. EUR/USD heads into overnight trade marginally lower at ~ 1.1720 within an intraday range of 1.1684-1.1758.

EMFX: Performance in EMs was skewed to the downside due to the broad USD strength. TRY underperformed ahead of Sept inflation due on Friday, exp. 2.6% M/M (prev. 2.04%). In Latam, Brazilian Industrial output is also due, expected to rise 0.3% M/M in August (prev. -0.2%) and fall 0.8% Y/Y (prev. 0.2%).

02 Oct 2025 - 20:31- ForexUS Research- Source: Newsquawk