The dollar maintained strong gains after positive U.S. data decreased expectations for Federal Reserve easing. However, it fell following a government shutdown, sparking concerns about economic impact. The dollar index dropped 0.2% to 97.61, down 10% for the year, marking the largest annual loss since 2003. The shutdown occurred due to the Senate’s failure to pass a funding bill. President Trump threatened benefit cuts if an agreement wasn’t reached. Shutdowns historically weaken the USD, especially against safe-haven currencies like the yen, Swiss franc, and euro. Further political uncertainty could push the USD lower, but a quick resolution may limit the impact. The dollar’s decline boosted gold futures to a record high above $3,900 an ounce.

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1. The Federal Reserve decided to keep interest rates steady as the US economy continues to recover from the impact of the pandemic.

2. Bitcoin prices surged to a record high after Elon Musk’s Tesla announced a $1.5 billion investment in the cryptocurrency.

3. Amazon reported strong earnings in the fourth quarter, with revenue reaching $125.6 billion, exceeding analysts’ expectations.: Dollar falls on U.S. government shutdown, now on pace for worst annual decline in 22 years