US shutdown end could also put a stop to the dollar rally – Credit Agricole | investingLive

Credit Agricole says that the dollar rally from October is poised to go up against a major test with the potential for the US government shutdown to come to an end. The firm says that softer US labour market data could yet temper with the hawkish repricing that has taken place since the October FOMC meeting.

“An end to the shutdown and a resumption of economic data releases could highlight its negative economic impact and embolden the doves.”

Adding that as the shutdown ends and Treasury cash hoarding unwinds, any liquidity premium attached to the dollar could fade and that also takes away another supportive factor for the greenback.