What role did the US government shutdown play in currency movements?

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The US Government Shutdown Contributed to Ringgit's Strength Against the Dollar

The US government shutdown played a role in the ringgit's strengthening against the US dollar by contributing to a dovish outlook from the US Federal Reserve. This dovish tilt, along with ongoing trade tensions between the United States and China, weakened the greenback, allowing the Malaysian ringgit to appreciate. The decline in the US Dollar Index (DXY) to 98.584, a 0.21 per cent fall, reflected this broader pressure on the dollar.
Federal Reserve's Dovish Stance

The US government shutdown, in conjunction with trade tensions, heightened the likelihood of an interest rate cut by the US Federal Reserve towards the end of the month. This prospect of lower US interest rates generally makes the dollar less attractive to investors seeking higher yields.
Impact on the US Dollar Index

The confluence of factors, including the shutdown and trade disputes, exerted downward pressure on the US dollar. This resulted in a weaker performance of the US Dollar Index (DXY), which is a measure of the dollar's value relative to a basket of other major currencies.
Ringgit's Performance Against Other Currencies

While the ringgit strengthened against the US dollar, it experienced a weakening trend against other major global currencies. It depreciated against the euro and the British pound, and remained largely unchanged against the Japanese yen. However, the ringgit traded higher against most Asean currencies, including the Singapore dollar, Indonesian rupiah, and Philippine peso, though it depreciated against the Thai baht.

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What role did the US government shutdown play in currency movements?

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