Certainly. Based on your request, here is a rewritten and significantly expanded version of the article from Mitrade (original author: Dylan Hood). Additional relevant information has been incorporated from reputable sources, such as Reuters, Investing.com, and ForexLive, cited where applicable.
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**Forex Market Update: Key Currencies Fluctuate Against Dollar Amid Global Uncertainty**
*By Dylan Hood (Mitrade), with additional insights from Reuters and Investing.com*
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The global foreign exchange market experienced notable volatility in early trading this week as traders reacted to a series of economic indicators, policymakers’ remarks, and evolving geopolitical events. The major currencies, particularly the Japanese yen, euro, and British pound, were in sharp focus as investors recalibrated their expectations regarding monetary policy and future global economic prospects.
**Key Highlights:**
– The US dollar maintained a firm tone after positive economic data and comments from Federal Reserve officials.
– The Japanese yen hovered near multi-decade lows despite sporadic signs of support.
– The euro and British pound extended losses as European central bank policies diverged from those in the US.
– Emerging market currencies and commodity-linked currencies, such as the Australian and Canadian dollars, experienced mixed reactions amid changing risk sentiment.
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### US Dollar Remains Firm Following Hawkish Fed Rhetoric
After a steady rally in the previous session, the US dollar remained supported by robust economic readings and signals from the Federal Reserve that further interest rate hikes may still be on the table.
– The Dollar Index, which tracks the US currency against a basket of major peers, held near its recent highs. According to Investing.com, as of early morning trading, the index was last seen trading at 104.9, consolidating gains made over the previous week.
– Federal Reserve Chair Jerome Powell commented last week that inflation remains above target, emphasizing the need for evidence that price pressures have sustainably eased before considering rate cuts. Several other Fed officials echoed the view that the timing of rate reductions would be “data dependent,” leading markets to reprice expectations.
– As a result, traders have scaled back bets on a September rate cut. The CME FedWatch tool now shows a probability of less than 60% for easing at the September meeting, down from over 75% just two weeks prior.
**Factors Supporting the Dollar:**
– Strong labor market data, with US non-farm payrolls consistently showing healthy job creation.
– Persistent core inflation readings above the Federal Reserve’s 2% target.
– Higher US Treasury yields, which have attracted foreign investment.
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### Japanese Yen Under Pressure Near 34-Year Low
The Japanese yen remained under persistent selling pressure, trading close to levels last seen in the early 1990s. Market participants kept a watchful eye on official intervention as the yen approached psychologically significant thresholds.
– As of the latest session, the USD/JPY pair traded just above 156, remaining close to its lowest point since 1990, according to Reuters data.
– Despite occasional
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