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US dollar strengthens before Federal Reserve Chair’s comments; Japanese yen stays around 150 mark.

US Dollar Strengthens Ahead of Fed Chair Remarks

The dollar remains firm against its peers

The US dollar is holding its ground against other major currencies as investors await remarks from Federal Reserve Chair Jerome Powell. There is growing anticipation that the central bank will maintain higher interest rates for a longer period.

Yen Hovers Near 150-Mark

The Japanese yen continues to hover near a two-week low, just below the psychologically significant 150-mark. Traders are closely monitoring this level, as it could potentially trigger currency intervention by Japanese authorities.

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Australian and New Zealand Dollars Slide

The Australian dollar has taken a hit after disappointing domestic jobs data. Meanwhile, the New Zealand dollar has hit a near one-year low. Both currencies are feeling the pressure amid economic uncertainties.

The US Dollar Index Remains Flat

The US Dollar Index, which measures the dollar against a basket of currencies, has remained mostly flat during Asian trading hours. It is currently hovering around the previous day’s high of 106.63.

Euro and Pound Face Pressure

The euro is holding steady at $1.0534 after facing pressure from the greenback overnight. Sterling is edging closer to a two-week low at $1.21235. Both currencies are affected by the US dollar’s strength and market sentiment.

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Expectations of a Hawkish Tone from Powell

The recent surge in US Treasury yields has provided support for the US dollar. Investors are expecting Fed Chair Powell to strike a hawkish tone in his upcoming appearance. However, there is also caution among policymakers due to tightening financial conditions and geopolitical events.

Fed’s Monetary Policy Meeting Approaching

Fed policymakers are signaling a pause in interest rate hikes for the next couple of months. They are carefully considering mixed signals from strong US economic data and persistent high inflation. The next monetary policy meeting is scheduled for the end of October.

Potential for Currency Intervention in Japan

The Japanese yen has strengthened slightly against the dollar but remains close to the 150-level, which could trigger currency intervention by Japanese authorities. The Bank of Japan is closely monitoring the situation and stands ready to intervene if necessary.

Impact of Rising US Yields on Dollar/Yen Pair

The movement of the dollar/yen pair will depend on whether US yields continue to rise faster than their Japanese counterparts. Analysts believe there is a high risk of FX intervention by the Bank of Japan if the situation escalates.

Australian Dollar Falls on Weak Employment Data

The Australian dollar has tumbled following disappointing employment data. It hit a low of $0.6296 against the greenback, reflecting concerns about the country’s economic performance.

New Zealand Dollar Hits 11-Month Low

The New Zealand dollar has reached an 11-month low, trading at $0.5825. It is experiencing downward pressure due to various economic factors and market sentiment.

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