3 Dollar Downers: Stunned by Stone, fears the Fed, and shivers over the shutdown

The US Dollar is falling with significant drops against commodity currencies.
The arrest of former Trump adviser Stone and reports about the Fed's dovishness weigh.
The ongoing shutdown does not help, and there's no end in sight.

The US Dollar is falling against the recovering euro and more prominently against commodity currencies. Why is the greenback grinding lower? Here are the reasons.

1) Roger Stone arrested

Roger Stone, a former adviser to Donald Trump, was arrested in Florida. He is being charged with lying about his cooperation with Wikileaks about the release of damaging material against Hillary Clinton in the campaign. He is also accused of lying about his relations with the Trump campaign.

The story complicates the President's legal issues. Former campaign manager Paul Manafort will also appear in court today.

Trump's policies boosted the US Dollar, and his issues weigh on the greenback.

2) Fed doves fly

The Wall Street Journal reported that the Fed is discussing ending the balance sheet reduction earlier than expected. That would be a full turnaround for Fed Chair Jerome Powell. In the previous rate decision, he said that the balance sheet reduction would continue "autopilot." He made other sounds since then, about both rates and the balance sheet.

If the Fed announces a policy change already in its upcoming decision, it implies more US Dollars floating in markets, devaluing the American currency.

3) Ongoing shutdown

The most extended US government shutdown has no end in sight. After the Senate rejected two competing bills to reopen the government, the Trump Administration floated an idea to temporarily open the government if Democrats approve a downpayment for the wall. Democrats rejected this quite quickly.

The shutdown is taking an economic toll on the US. Top White House Economic Adviser Hassett said that growth could be 0% in Q1 2019 if the shutdown continues.

All in all, it's not a happy Friday for the world's reserve currency.

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