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Dollar extends gains as post-Fed musings continue to play out

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The market continues to digest the post-Fed musings and a more hawkish communique yesterday is reason enough for the dollar to pull higher in trading today again. The greenback is running to fresh highs on the day now in European trading, with GBP/USD slumping by 1% to 1.1270 currently:

The pair is losing altitude after its recent run up above 1.1500 and the latest drop now puts into focus support closer to 1.1200, before we start talking about 1.1000 again. The BOE policy meeting later today will be another key risk event to be mindful about for the pair.

Meanwhile, EUR/USD is down 0.5% to 0.9765 and closing in on key support as noted earlier here. USD/JPY is up 0.2% to 148.15 as buyers continue to keep the faith but are still being challenged somewhat by Japanese officials, who are trying to maintain their composure in limiting any upside rush in the pair.

Elsewhere, USD/CHF is trading up 0.8% to above 1.0100 while AUD/USD is down 0.5% to 0.6310, poised for a sixth straight day of losses. The latter seems to be headed towards another test of 0.6200 again next:

As the dollar firms, we are seeing equities keep more sluggish and bond yields hold higher on the session. S&P 500 futures are down 8 points, or 0.2%, while European indices are down roughly 1% across the board. 10-year Treasury yields are still up a little over 5 bps to 4.157% at the moment.