US shutdown compounds worst year for currency trading since 2005

US Shutdown Worsens Tough Year for Currency Trading

WASHINGTON – The record-long US government shutdown has deepened currency traders’ worst performance in decades. With key economic data absent for weeks, uncertainty clouds the dollar’s direction.

Market Impact

According to a BarclayHedge index, foreign-exchange investors are experiencing their weakest year since 2005. The lack of government-issued data has discouraged traders from placing large bets and made quantitative funds struggle with limited information.

Wall Street’s Struggle

Major financial institutions, including Goldman Sachs, Morgan Stanley, and Bank of New York Mellon, reported a drop in currency trading revenues last quarter, even before the shutdown’s full effects were felt.

Strategists Delay Forecasts

As economic indicators remain unpublished, strategists have postponed updates to their currency forecasts. The scarcity of fresh data has also reduced foreign-exchange volatility to levels far below its long-term average—a stark contrast to the sharp fluctuations seen after President Donald Trump’s global tariff announcement in April.

“Crucial data have not been published in weeks, making traders less willing to stake big bets on where the US dollar is headed.”

Summary

The prolonged US government shutdown has created a vacuum of economic data, leaving traders hesitant, volatility subdued, and 2025 the toughest year for currency markets in two decades.

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The Straits Times The Straits Times — 2025-11-07

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