US shutdown compounds worst year for currency trading since 2005

US Shutdown Worsens Currency Trading Performance

The ongoing US government shutdown, now the longest on record, is driving currency traders toward their worst year in decades. The absence of key economic data has created uncertainty about the US dollar's direction.

Data Gap Hurts Market Confidence

For weeks, crucial economic and market statistics have not been released, leaving traders reluctant to make large bets on the dollar. This lack of information has particularly impacted computer-driven quantitative funds, which rely heavily on high-quality data, and has caused strategists to delay updating their currency forecasts.

Declining Currency Trading Revenues

Even before the shutdown intensified the data vacuum, major financial institutions reported declines in currency trading revenues last quarter. Firms such as Goldman Sachs Group, Morgan Stanley, and Bank of New York Mellon have all experienced lower earnings in this area.

Reduced Volatility in Foreign Exchange Markets

Foreign exchange volatility has dropped significantly below its long-term averages, a notable shift from the extreme fluctuations seen earlier in the year, such as those triggered by the President’s tariff announcements in April.

“Foreign-exchange investors are on course for the poorest annual performance since 2005,” according to a BarclayHedge index.
“Crucial data have not been published in weeks, making traders less willing to stake big bets on where the US dollar is headed.”

Published Nov 07, 2025, 10:04 PM, Washington

Author’s summary: The historic US government shutdown has deprived currency traders of essential data, pushing the dollar market toward its weakest year since 2005 and lowering volatility to uncommon lows.

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

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