The US Dollar fell to a one-week low against key currencies on Wednesday as the federal government entered a shutdown that is expected to postpone the release of important employment data.

Funding for the government lapsed at midnight in Washington (04:00 GMT) after Democrats and Republicans were unable to reach a last-minute temporary agreement.

Senate Republican Leader John Thune announced that the chamber would hold another vote on the House-approved bill on Wednesday, with the Senate scheduled to reconvene at 14:00 GMT.

The Dollar index, which tracks the greenback against six major peers including the Euro and Yen, slipped 0.2% to 97.635 at the time of writing, after briefly touching 97.584, its lowest level since last Wednesday, Reuters reports.

On Tuesday, President Donald Trump cautioned congressional Democrats that allowing the government to shut down would enable his administration to take “irreversible” steps, including shutting down programs they value.

The US Labor and Commerce departments announced that their statistical agencies would suspend data publications during a partial government shutdown. This would include Friday’s nonfarm payrolls report, a closely watched indicator that investors view as critical in assessing whether the Federal Reserve may move to cut interest rates later this month.

Overnight, the greenback came under pressure after a mixed reading from the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS).

The data showed that US job openings edged up slightly in August, while hiring fell, pointing to a cooling labour market.

With official data releases on hold, markets are expected to place greater weight on private-sector indicators, including the ADP employment report due later on Wednesday.

The duration of the shutdown could prove critical for markets, with the Federal Reserve’s next policy meeting not scheduled until 29th October. Traders are now pricing in a near-certain quarter-point rate cut at that meeting, with market-based probabilities standing at about 95%, according to LSEG data.

The Dollar is likely to extend its decline today if political signals point to a prolonged shutdown, whilst further disappointing US economic data could add additional pressure on the currency.

Elsewhere, the Euro climbed as much as 0.3% to $1.1767, its strongest level since 24th September. Meanwhile, the Dollar fell 0.3% to 147.46, marking its lowest point since 19th September and extending a three-day decline totalling 1.2%.