U.S. Government Shutdown Impacts Currency Traders
The longest government shutdown in United States history is contributing to a challenging year for currency traders by limiting available economic data and clouding the outlook for the dollar.
Currency Market Challenges
Foreign-exchange investors are on track for their worst annual performance since 2005, according to the BarclayHedge index. Prior to the shutdown, major financial institutions such as Goldman Sachs Group Inc., Morgan Stanley, and Bank of New York Mellon Corp. had already reported declines in currency trading revenues in the previous quarter.
Effects of Data Shortage
Due to the federal shutdown, several crucial economic and market positioning reports have not been released in weeks. This includes a key monthly indicator for the U.S. economy. As a result, traders are hesitant to make significant bets on the dollar's direction, quantitative funds have reduced data to analyze, and strategists are 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."
Investor insights and analysis, previously provided by a leading Canadian investing news source, have also been disrupted with subscription and delivery issues reported.
Author's Summary
The prolonged U.S. government shutdown severely restricts economic data, leading to uncertainty and a tough year for currency traders and financial strategists alike.