The US dollar fell on Wednesday after private sector job data in the US raised concerns about the strength of the labor market, while investors prepare for an imminent end to the US government shutdown, a step that is expected to unleash a flood of delayed economic data. ADP, a payroll processing company, reported that US companies cut more than 11,000 jobs a week until late October, indicating weekly shifts in hiring trends and a weakening labor market that the US Federal Reserve (the central bank) is closely monitoring. The dollar fell following the release of the data and struggled to recover its losses in early Asian trading sessions on Wednesday, as traders increased their bets on a Federal Reserve rate cut in December. The euro stabilized at $1.1586, while the British sterling moved away from a seven-month low to trade at $1.3149 in the latest transactions. The dollar index, which measures the performance of the US currency against a basket of currencies, stabilized near its lowest level in over a week at 99.46. "I think the alternative data points to a weaker picture in the labor market... but what if we see a further deterioration in the US labor market? I think that remains an open question," said Sim Mo Seong, a currency analyst at a Singapore bank. He added, "The broader set of data suggests that the labor market is cooling, but gradually, and I think we should probably see some confirmation of that after official data resumes likely next week, with the reopening of the US government." According to the CME Group's FedWatch tool, traders are now expecting a 68% chance that the Federal Reserve will cut interest rates by 25 basis points next month. The Republican-controlled House of Representatives is set to vote Wednesday afternoon on a compromise bill that would fund government agencies and end the shutdown that began on October 1. This development led to a rise in high-risk currencies such as the Australian and New Zealand dollars, which each rose by 0.02% to $0.6529 and $0.5656, respectively. Meanwhile, the Japanese yen stabilized at 154.08 per dollar after falling to a nine-month low of 154.495 in the previous session.
