US Dollar Index softens to near 100.00 amid prolonged US government shutdown

• US Dollar Index loses ground to near 100.15 in Wednesday's Asian session.  
• US Government shutdown poised to become the longest in US history, weighing on the DXY. 
• Traders await the US October private payroll and ISM Services PMI data later on Wednesday.

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, trades on a negative note around 100.15 during the Asian trading hours on Wednesday. The DXY retreats after reaching a three-month high of 100.25 as the US federal shutdown is set to become the longest in US history.

The US federal government shutdown has entered its 36th day. The duration ties the previous record set in 2019, during President Donald Trump's first term in the White House. The latest effort to break the logjam, by passing Republican-backed temporary legislation through Congress, failed in the Senate for the 14th time on Tuesday. Concerns over the impact of the shutdown on the US economy could exert some selling pressure on the US Dollar. 

The Federal Reserve (Fed) lowered its benchmark overnight borrowing rate at its October meeting last week to a range of 3.75%-4.0%, but Fed Chair Jerome Powell said another cut this year was "not a foregone conclusion." The likelihood of a December interest rate cut by the US central bank has declined from 93% to 70% after the hawkish remarks from Fed officials. This, in turn, could provide some support to the DXY.

The US October private payroll and ISM Services Purchasing Managers Index (PMI) reports will be the highlights later on Wednesday. ADP Nonfarm Employment Change is projected to show 25K jobs added, compared to a 32K loss in the previous reading. In case of a stronger-than-expected outcome, this could lift the US Dollar against its rivals in the near term.