The dollar softened on Wednesday before regaining ground as optimism grew that a potential U.S. government shutdown would be brief. Vice President JD Vance reassured investors, saying he did not expect a prolonged standoff. Fitch Ratings echoed that sentiment, noting the dispute carried no immediate sovereign rating implications. Equity markets welcomed the easing fears, with healthcare leading gains in the S&P 500.

Economic Data and Fed Outlook

ADP payrolls showed a steep 32,000 decline in September, the sharpest in over two years, stoking bets on further Fed rate cuts. ISM data signaled manufacturing edging toward recovery with easing price pressures. Challenger job-cut data will provide another read on labor health. Boston Fed’s Susan Collins signaled openness to more easing, while New York Fed’s John Williams supported cuts but reiterated the 2% inflation target as policy anchor.

Politics and Policy

The Supreme Court set a January hearing on Trump’s effort to remove Fed Governor Lisa Cook, a case with implications for central bank independence. Trade and industrial policy also remained in focus: Trump said soybeans would headline talks with Xi Jinping, while the Department of Energy acquired a 5% stake in Lithium Americas’ Thacker Pass project alongside GM.

FX and Global Moves

EUR/USD posted a doji near its 21-day average, but bulls need a break above 1.18 for momentum. Sterling slipped below 1.35 despite recent higher lows, while USD/JPY pared early losses, returning to its Ichimoku cloud. The Aussie edged higher on firmer gold prices, while the franc was steady ahead of CPI data.

Bonds, Equities, Commodities

Treasuries steepened as yields fell 2–6bps, with the 2s–10s spread widening to +56.1bps. The S&P 500 rose 0.41%. Oil slipped 0.69% on rising U.S. inventories, gold gained 0.18%, and copper added 0.51%.

By the close: EUR/USD +0.01%, GBP/USD +0.29%, AUD/USD +0.05%, USD/JPY -0.58%. DXY -0.06%.