U.S. Dollar Surge Amid Government Shutdown Fears

The U.S. dollar rose sharply in early Asian trading on Wednesday, marking its strongest position in over two months. Investor concerns over an impending U.S. government shutdown have grown, leading to heightened demand for safe-haven assets. The dollar index increased by 0.3%, reaching a high of 98.91, a level not seen since August 5.

On the other hand, the kiwi dollar fell by 1% to $0.5739 following an unexpected 50-basis-point interest rate cut from the Reserve Bank of New Zealand. With more easing anticipated, Joseph Capurso from Commonwealth Bank of Australia noted that further declines for the kiwi dollar seem likely.

Meanwhile, precious metals, particularly gold, have seen new highs as investors seek safer investments amid global economic uncertainty. Analysts suggest this uncertainty is exacerbated by the U.S. government shutdown. Government bond yields edged up slightly as markets await potential Federal Reserve rate changes later this month.