The U.S. dollar fell on Thursday after President Donald Trump signed a deal to end the government shutdown, while the Japanese yen fell to a record low against the euro after Prime Minister Sanae Takaichi signaled support for low interest rates.
The British pound briefly weakened after data showed the U.K. economy barely grew in the third quarter, before rebounding. In Australia, positive jobs data showing a drop in the unemployment rate helped the Australian dollar strengthen to a two-week high, reducing expectations of another interest rate cut.
Currency markets are set to be volatile in the coming days as delayed economic data begins to be released following the end of the government shutdown. The White House warned that jobs and inflation data for October may not be released.
The prolonged weakness in the yen has added to pressure on the Bank of Japan (BOJ) to raise interest rates. Traders now see a 22% chance of a rate hike in December and a 43% chance by January. Economists have warned that the yen's weakness could reignite food and energy inflation.
In Europe, the pound rebounded to $1.3146, while the euro strengthened slightly to $1.1606. In Australia, a strong jobs market supported the Aussie, which rose to $0.6564, a two-week high.
