EUR/USD extends gains as US Dollar falters on weak Consumer Confidence, shutdown fears

• The EUR/USD extends its gains for a third consecutive day as the US Dollar remains on the defensive.
• Softer US Consumer Confidence and looming government shutdown risk weigh on the Greenback.
• JOLTS Job Openings surprise to the upside but fail to boost the Dollar.

The Euro (EUR) edges higher against the US Dollar (USD) on Tuesday, with EUR/USD erasing earlier losses as the Greenback remains on the defensive following the latest batch of US data. Weaker-than-expected consumer confidence figures and concerns over a potential government shutdown in the United States (US) kept the Greenback on the back foot, helping the Euro reverse its early decline.

At the time of writing, EUR/USD is trading around 1.1743 during the American session, extending gains for the third straight day. Meanwhile, the US Dollar Index (DXY), which measures the Greenback's value against a basket of six major peers, is hovering near 97.75, down about 0.20% on the day.

Data released earlier on Tuesday showed the Conference Board's Consumer Confidence Index fell to 94.2 in September from a revised 97.8 in August, signaling weaker household sentiment. Meanwhile, the JOLTS Job Openings report for August came in at 7.227 million, slightly above expectations of 7.20 million and up from July's revised 7.208 million from 7.181 million.

Despite the small upside surprise in Job Openings, the Dollar failed to find support, as investors focused on weaker consumer confidence and lingering concerns about a slowing labor market.

Boston Fed President Susan Collins said on Tuesday that the current "modestly restrictive" monetary policy stance is appropriate for now, but left the door open to further rate cuts if incoming data support easing. Collins said she backed the Fed's recent rate cut, given the risks to the central bank's dual mandate. She added that while the threat from inflation persists, upside risks to price pressure have waned.
She described her baseline outlook as "relatively benign," expecting inflation to remain elevated into next year before easing, and predicting that hiring should rebound as firms adjust to tariffs. However, she warned that weaker labor demand could push unemployment higher, underscoring that the Fed's policy path remains data-dependent.