For Currency Traders, the U.S. Shutdown Worsens an Already Difficult Year
The longest U.S. government shutdown on record is contributing to the worst year for currency traders in decades. A lack of economic data has made the future of the dollar uncertain.
Impact on Currency Markets
According to the BarclayHedge index, foreign exchange investors are on track for their poorest annual performance since 2005. This downturn was already noticeable on Wall Street before the shutdown
- Goldman Sachs Group Inc.
- Morgan Stanley
- Bank of New York Mellon Corp.
These institutions reported decreased currency trading revenues last quarter.
Effects of the Federal Shutdown
Because of the shutdown, key economic data and market positioning reports have not been published for weeks, including the vital monthly U.S. economic readings. This has led to:
- Traders hesitating to make large bets on the dollar's direction
- Quantitative funds operating with less reliable data
- Strategists postponing updates to their forecasts
“Amid the federal shutdown, crucial economic and market positioning statistics have not been published in weeks — including what would have been a critical, monthly reading of the U.S.”
These conditions cloud the outlook for the dollar and intensify challenges faced by currency traders this year.
Author's Summary
The prolonged U.S. government shutdown has severely disrupted economic data flow, causing heightened uncertainty and worsening losses for currency traders in 2025.
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