Dollar Rises 0.51% as Markets Price Chance of December Fed Rate Hike
Key Facts
The dollar index rose 0.51% to 102.20 in trading on Tuesday, November 10, 2026, as inflation data and comments from a Federal Reserve official put the possibility of tighter monetary policy back in focus. According to the U.S. Bureau of Labor Statistics, the Consumer Price Index rose 0.4% in October, after increasing 0.6% in September. The index excluding food and energy also rose 0.3% in October. The CME Group’s FedWatch tool showed markets pricing an 89% probability of a U.S. rate hike in December. The U.S. currency’s advance came alongside rising bond yields, reflecting a shift in rate-path expectations.
Short-dated bond yields moved sharply after the price data, with the U.S. two-year Treasury yield rising 19.07 basis points to 4.738%. The yield is sensitive to monetary policy expectations, and Reuters has noted that it typically moves in line with rate expectations. October’s monthly increase in the price index was slower than September’s 0.6% reading. The core index, which excludes food and energy, posted a monthly increase of 0.3%. Price data thus remained central to assessing whether the Fed would need to keep policy tight or raise rates again.
Rate bets were reflected in major currency pairs, with the euro falling 0.48% to $1.117. The dollar, meanwhile, rose 0.47% to 158.66 yen and gained 0.89% to 0.8251 Swiss francs. The moves coincided with markets pricing a high probability of a U.S. rate hike in December, according to the FedWatch tool. Currency performance therefore reflected diverging monetary policy expectations, while the euro’s move alone was not enough to determine the direction of European policy. Markets are focused on messages from central bank officials and data due ahead of their next meetings.
Commenting on the U.S. economy, Christopher Waller said, "Economic activity is strong, the labor market is stable, but inflation is well above" the Fed’s 2% target. The assessment reflects persistent concern about price pressures despite the slowdown in the monthly increase in the Consumer Price Index between September and October. Reuters linked the dollar’s rise to the inflation data and Waller’s comments arguing for further rate hikes. October’s reading remains part of the picture policymakers will assess alongside activity and labor market conditions. The Fed is scheduled to hold its next meeting on December 8 and 9, with a news conference on the second day.
Announced dates in Europe include Christine Lagarde’s participation in a panel discussion at the Paris Peace Forum on November 11, followed by an onstage conversation with Timothy Geithner on November 12. The European Central Bank’s Governing Council is scheduled to meet on monetary policy on December 16 and 17, with a news conference after the second day. In the United States, the Bureau of Labor Statistics has set December 10 for the release of November Consumer Price Index data, at 8:30 a.m. Eastern time. These dates place price data and officials’ remarks among the next milestones investors are watching. The upcoming data and meetings will provide fresh updates on the landscape that led markets to price a chance of a U.S. rate hike in December.