Dollar falls as concerns grow over potential revelations from unclear US data

Dollar Weakens Amid Economic Concerns

SINGAPORE, Nov 14 (Reuters) – The dollar faced difficulties bouncing back from notable losses and appeared set for a weekly decline as investors anticipated upcoming U.S. data after the government reopened, which is expected to reflect a weakening economy.

The dollar’s overnight dip coincided with falling U.S. stocks and bonds, eerily similar to the market upheaval seen in April, as investors hesitated to gamble on a Federal Reserve interest rate cut in December.

“There’s a ‘Sell America’ sentiment again,” commented Ray Attrill, who heads foreign exchange research at National Australia Bank.

Despite expectations that the Fed may adopt a more hawkish stance, the dollar declined, hitting a two-week low against the euro which rose above $1.16, settling at $1.1630.

The Swiss franc also held near a three-week high, stabilizing at 0.7933 francs per dollar. In comparison to a range of currencies, the dollar fluctuated near a two-week low of 99.27.

This particular dollar index was tracking towards a 0.3% decline for the week.

“A wave of economic data from the U.S. is set to be released next week, and it might not look good,” Joseph Capurso, head of foreign exchange at the Commonwealth Bank of Australia, remarked. He suggested that the market seems to be bracing for a surge of negative economic reports.

Typically, such a scenario would increase expectations for the Fed to adopt a more aggressive easing approach to buoy the struggling economy, yet Capurso pointed out that this uncertain data release could be a reason why federal funds futures are moving in the opposite direction.

The White House has suggested that data regarding the U.S. unemployment rate for October might not be obtainable since the household survey necessary for it was not conducted during the government shutdown.

“When navigating through uncertainty, you tend to slow down. In times of economic uncertainty, businesses probably hesitate to make cuts,” Capurso added.

At present, market observers estimate less than a 50% chance for a 25 basis point rate cut in December, while the likelihood of a January cut is nearly fully factored in. Expectations for interest rates in 2026 have mostly stayed constant.

Turning to other currencies, the pound decreased by 0.3% to $1.3152, failing to sustain its earlier overnight gain of 0.45% against the dollar’s weakness.

This dip in the pound followed a Financial Times report revealing that British Prime Minister Keir Starmer and Chancellor of the Exchequer Rachel Reeves had dismissed plans to hike income tax, a notable shift just weeks ahead of the November 26 Budget.

“Weakening fiscal resolve amid political instability doesn’t bode well for the pound,” said Sim Moe Siong, a currency strategist at Bank of Singapore.

The struggling yen found some stability as the dollar eased, though it remained near nine-month lows from earlier in the week, trading at around 154.58 to the dollar.