Analysts: Government shutdown pressures the dollar, indicators show further downside risks for the dollar

ChainThink news, October 1st, as the United States enters its first government shutdown in nearly seven years, the US dollar is experiencing its longest consecutive decline in a month. Historical data shows that government shutdowns usually put pressure on the US dollar, and the options market also reflects this trend. The risk reversal indicator (used to measure the gap between demand for call and put trades) shows that the US dollar faces further downside risks in the coming month. Mohit Kumar, Chief European Strategist at Jefferies, said that the extent of stock market declines and increases in US Treasury prices may be relatively moderate, but "the foreign exchange market is one where we would not expect a reversal of the current trend," he expects the weakness of the US dollar to continue. The duration of the government shutdown is crucial, the longer the shutdown, the more pressure the US dollar will face. This year, the US dollar has fallen to its lowest level since 2022, due to factors including policy uncertainty under Trump's administration, an expanding deficit, and pressure on the independence of the Federal Reserve, all of which have raised investor concerns. (Jinshi)