Dollar Hits 19-Month High of 103.08 Before Retreating

Key Facts

The dollar index hit its highest level in about 19 months during the Nov. 12, 2026 session, at 103.08, before retreating to 102.88 at the time of a Reuters report. Reuters said the index was up 0.03% at that level, after reaching its highest point since April 2025. The move followed strong U.S. inflation data that led markets to reprice the Federal Reserve’s rate path toward a more hawkish stance. The dollar thus recorded the session high before giving back a little ground ahead of the report. U.S. rate bets remained a key driver of the currency, as investors also watched differences in the policy paths of major economies.

The U.S. consumer price index rose 0.4% in October from a month earlier, after a 0.6% increase in September, according to the U.S. Bureau of Labor Statistics. The index excluding food and energy rose 0.3% in October, the same monthly increase recorded in September and August. The figures show a slower monthly increase in the headline index than in September, while the core index held its pace steady for three months. The bureau said the energy index rose 0.7% in October, after climbing 5.2% in September. The shelter index also rose 0.3% in October, contributing more than 30% of the monthly increase in the headline index, according to the bureau’s data.

Labor-market data showed initial jobless claims rose to 200,000 in the week ended Nov. 7, from 191,000 after the previous week’s figure was revised, according to the Associated Press. The reading was above economists’ expectations of 195,000 claims, while the four-week average held at 195,250. Even so, claims remained at or below 200,000 for nine consecutive weeks through Nov. 12. They did not exceed 230,000 in any week during the year through that date, the agency said. The figures offer a picture of a labor market where weekly claims remained low despite the latest reading topping economists’ expectations.

In currency markets, the euro fell 0.03% to $1.1086 at the time of a Reuters report, after reaching $1.106675 during the Asian session, its lowest level since May 2025. The euro had fallen about 1.3% over the preceding Tuesday and Wednesday, the report said. In dollar-yen trading, the dollar slipped to 159.62 yen after touching 159.945, its highest level in more than two months. Reuters said traders were focused on interest-rate differentials and growing bets on U.S. rate increases as the yen approached 160 per dollar. Japan’s top currency official, Atsushi Mimura, said forgetting this summer’s interventions was “premature,” as the yen again neared that level.

Traders’ bets on a 25-basis-point U.S. rate increase in December rose to 87% on Nov. 11, from about 70% a month earlier, according to CME Group’s FedWatch tool, Reuters reported. Federal Reserve officials left open the possibility of a 50-basis-point increase amid concerns that inflation would persist. Christopher Waller said he intended to support a quarter-point increase at the Dec. 8 and 9 meeting unless core inflation came in at 0.3% or higher in the next reading. After the inflation data, Goldman Sachs forecast increases in December and March, while Deutsche Bank forecast increases in December, January and March. Tiffany Wilding, an economist at PIMCO, said the risk of near-term inflation persistence “warrants rate hikes at the December and January meetings, with the possibility of another increase in March.”

Traders were also watching the possibility that the yield gap between the United States and the euro zone could widen. Reuters quoted Kenneth Broux, a strategist at Societe Generale, as saying that New York Fed President John Williams’ support for, or even discussion of, a 50-basis-point increase could prompt the market to continue repricing. Broux added that the European Central Bank could stop raising rates after its December meeting, potentially widening the yield gap in the dollar’s favor. In Japan, annual wholesale price inflation accelerated to 7.1% in October from 6.8% in September, Reuters reported. The agency’s poll showed that many analysts expected Japan’s next rate increase to come as soon as the following month, as the yen neared 160 per dollar.

Attention turns the following day to the U.S. producer price index for October, scheduled for release on Nov. 13, 2026, at 8:30 a.m. Eastern time, according to the Bureau of Labor Statistics. The final demand index rose 1.3% in September. Investors are awaiting producer-price data after the consumer inflation reading rekindled rate expectations, while the Federal Reserve’s Dec. 8 and 9 meeting remains the next monetary-policy milestone cited in Waller’s remarks. The Federal Reserve calendar also listed a virtual discussion by Christopher Waller on supervision and regulation on Nov. 13, alongside a speech by him on the economic outlook on Nov. 10. The next core inflation reading remains relevant to Waller’s stated position on a December increase.