Dollar Dynamics Amid Global Economic Shifts

The dollar showed resilience, achieving a two-year high amid global central bank activities and looming U.S. government shutdown threats. Its performance reflects international currency movements, economic pressures, and geopolitical concerns, sparking debates over potential trade wars and economic growth impacts across major regions including Europe and Japan.

The dollar fell on Friday but hovered near a two-year high, poised to end its third week of gains as global central bank actions and a potential U.S. government shutdown loomed large. Earlier, the dollar hit a two-year peak before settling down 0.30% against a basket of currencies at 108.1.

U.S. government funding risks emerged after a spending bill proposed by Trump was rejected in the House, pushing the country towards a partial shutdown that threatens funding for federal workers and services. Goldman Sachs warned that each week of a shutdown directly reduces GDP growth by 0.15 percentage points.

Amid these tensions, market focus shifts to global trade discussions and currency fluctuations. The euro hit a low, rebounding slightly after Trump's comments on EU's need for U.S. oil. Yen and Swiss franc displayed strength, while the sterling and antipodean currencies struggled, reflecting broader economic pressures.

(With inputs from agencies.)