**Credit: Original article by Mitrade News Team**
Source: [Mitrade Forex Analysis, 19 August 2025](https://www.mitrade.com/insights/news/live-news/article-1-1049245-20250819)
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# Forex Market Analysis: August 19, 2025
## Executive Summary
The global foreign exchange (Forex) market has demonstrated significant volatility as traders weigh recent central bank policy signals, geopolitical risks, and mixed economic data. As of August 19, 2025, the US dollar showed resilience against major peers, while emerging market currencies faced heightened pressure due to risk-off sentiment and ongoing macroeconomic uncertainties. This article, based on reporting by the Mitrade News Team, provides an in-depth overview of major currency pairs, key drivers, technical perspectives, and what to watch for in the coming days.
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## Major Currency Pair Performance
### US Dollar (DXY) Index
– The US dollar index edged higher, trading above the 105.00 mark, extending gains for a third consecutive session.
– Elevated expectations for the Federal Reserve’s policy stance and cautious market sentiment drove safe-haven demand.
– Treasury yields remained elevated, supporting the greenback’s appeal.
### EUR/USD
– The euro remained under pressure, sliding to fresh monthly lows near 1.0750 against the dollar.
– Softer Eurozone economic data and dovish European Central Bank (ECB) rhetoric weighed on EUR sentiment.
– Renewed concerns about the bloc’s growth outlook added further downside.
### GBP/USD
– The British pound retreated below the psychological 1.2600 level.
– Disappointing UK retail sales data and ongoing stagflation fears overshadowed the Bank of England’s moderately hawkish bias.
– Sterling is viewed with caution, especially given the fluid political environment in the UK.
### USD/JPY
– The dollar climbed past 147.50 against the Japanese yen, retracing some early-week weakness.
– Divergent US-Japan rate differentials and verbal intervention threats from Japanese officials created a volatile backdrop.
– The Bank of Japan’s ultra-loose policy remains in focus as speculators test resistance levels.
### AUD/USD and NZD/USD
– Both the Australian and New Zealand dollars slipped as global risk sentiment deteriorated and commodity prices moderated.
– Lackluster Chinese macro releases amplified headwinds for Antipodean currencies.
### EM Currencies
– Emerging market currencies declined broadly as investors favored safe havens.
– The Chinese yuan hit a multi-year low despite the central bank’s stabilization efforts.
– Higher US yields pressured carry trades in Latin America and Southeast Asia.
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## Key Drivers Influencing Forex Market
### Central Bank Policy Expectations
– **Federal Reserve**: FOMC officials signaled that policy would remain data-dependent. While inflation is cooling, resilience in the jobs market and sticky service sector prices led to speculation about a prolonged period of tight monetary conditions.
– **ECB**: ECB policymakers adopted a cautious tone, highlighting uncertainties surrounding the region’s recovery and inflation trajectory. This fueled bets that rates would stay lower for longer.
– **Bank of England**: The BOE balanced inflation concerns with risks to growth. Recent data suggest stubborn price pressures, but weak consumption trends have capped aggressive rate-hike expectations.
– **Bank of Japan**: Despite hints that policy normalization could be on the horizon, no concrete timeline has been provided. This has left the yen vulnerable to further depreciation.
### Macro Data Flow
– **US**: Mixed readings from retail sales, industrial production, and housing starts have painted an uneven economic landscape. Inflation figures remain key for the Fed’s roadmap.
– **Eurozone**: Economic confidence surveys and industrial output data continue to disappoint. The post-pandemic recovery appears fragile.
– **UK**: Softer consumer spending amid high living costs and elevated wage growth keeps the Bank of England in a policy bind.
– **China**: Sl
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