Ahead of Friday’s Non-Farm Payroll release for August, the Dollar took another shot lower to new 15-month lows, which helped the EUR to extend its gains above 1.20 and XUA/USD (spot Gold) to close above $1,300/oz. Given the increase of geopolitical headlines, we had a pickup in currency volatility later in the month that aligned with a Jackson Hole speech by Janet Yellen that convinced some traders that Janet Yellen would likely not be around for a second term as chairperson of the Federal Reserve.

However, one key question on many trader’s minds as we head into the August NFP number on September 1 is whether we are simply seeing month-end portfolio rebalancing as a catalyst for USD-buying. On Wednesday, the US economic picture looked better after a report showing economic growth via GDP (3.0% vs. exp 2.7%) and the ADP employment report beat estimates.

In favor of the month-end portfolio rebalancing effect, some of the currencies that lost the most going into the NFP print were currencies that gained heartily against the greenback through the second half of August. Therefore, we may have seen closing out of positions to book profits before investors re-analyze the landscape at the start of September after Labor Day in the US when the volatility of year-end usually ticks higher.

Regardless of NFP’s outcome, there is one agenda item that is on nearly everyone’s list, and that is the debt ceiling negotiation and whether it will be lifted to avert a government shutdown in the US. On Wednesday, the U.S. Chief Economist for S&P, Beth Ann Bovino said, “Failure to raise the debt limit would likely be more catastrophic to the economy than the 2008 failure of Lehman Brothers and would erase many of the gains of the subsequent recovery.” For those wondering if a shutdown of the U.S. Government has a precedent, there was a shutdown of the government in 1995-1996, September 2011, and for a 16-day stretch in October 2013.