USD weakens as government shutdown ends, risk appetite returns

The US Dollar Index has declined 0.7% in early Monday trading as risk sentiment improves following the resolution of the US government shutdown. S&P 500 futures surged 0.9%, reflecting renewed investor confidence in the smooth functioning of US institutions. The shutdown's swift resolution, avoiding prolonged economic disruption, has prompted traders to reduce safe-haven dollar positions. Major pairs showed immediate reactions with EUR/USD climbing 65 pips to 1.0920 and GBP/USD advancing to 1.2850. The risk-sensitive AUD/USD gained 0.8% to 0.6580, while USD/JPY retreated to 149.30 as yen crosses benefited from improved sentiment. Technical indicators suggest the dollar index could test support at 103.50, with resistance now at 104.80. The market's focus shifts to upcoming Fed speakers this week, as traders reassess monetary policy expectations in light of reduced political uncertainty.