Dollar Hits Four-Week High at 102.53 as Traders Eye Rate Hike
Key Facts
The dollar index rose 0.3% to 102.53 in Wednesday’s November 11 session, its highest level in 4 weeks, according to Reuters coverage published via MarketScreener. The move came as U.S. inflation data and expectations of tighter monetary policy bolstered the currency. Bureau of Labor Statistics data showed the consumer price index rose 0.4% month over month on a seasonally adjusted basis in October, after a 0.6% increase in September. Core inflation also rose 0.3% in October, exceeding economists’ forecast of 0.2%, according to Reuters via Investing.com. The index had risen 0.5% in Tuesday’s session after the price data were released.
Major components of the price basket recorded monthly increases in October: the shelter index rose 0.3%, accounting for more than 30% of the monthly increase in the overall index. The food index rose 0.5%, while the energy index increased 0.7% during the month, according to the Bureau of Labor Statistics. The unadjusted level of the consumer price index for all urban consumers was 337.511, on a 1982-84=100 basis. That index rose 0.2% during the month before seasonal adjustment. The seasonally adjusted and unadjusted monthly increases reflect two different ways of measuring the index’s change in October.
In monetary policy pricing, LSEG data showed traders had fully priced in a 25-basis-point increase in December, while the odds of a 50-basis-point increase remained limited. Prices also reflected expectations for cumulative tightening of about 75 basis points through September 2027. Federal Reserve Governor Christopher Waller said he was inclined to support a 25-basis-point increase at the December meeting. He added that a core inflation reading of 0.3% or higher could warrant considering a 50-basis-point increase. Waller tied his position to the inflation path, while noting in a speech before the October data were released that price pressures persisted in core personal consumption expenditures services.
A currency trader at Marex said the dollar continued to receive broad support on expectations that the Federal Reserve would take a more hawkish monetary policy stance. In foreign exchange markets, the yen fell 0.3% to its weakest level in more than two months, approaching 160 yen per dollar, according to Reuters. The euro fell to $1.113 in the same session. The moves come as traders monitor differences between U.S. monetary policy expectations and those in other economies. December rate pricing remains a direct focus for currency moves in the weeks before the meeting.
Against the backdrop of the inflation debate, Waller said core personal consumption expenditures inflation rose 0.3% in September and 3.1% over the previous twelve months. More than 70% of core personal consumption expenditures services price components also recorded annual increases exceeding 3% in September. Waller also pointed to the unemployment rate falling to 4.1% in October, the economy adding 165,000 jobs during the month, and an upward revision of 85,000 jobs for the previous two months. These indicators put the labor market and prices together in the background to monetary policy deliberations. The Federal Open Market Committee meeting is scheduled for December 8 and 9, 2026.
Ahead of the meeting, attention is turning to U.S. producer price data for October, due to be released on November 13, 2026, at 8:30 a.m. Eastern time, according to the Bureau of Labor Statistics. Open sources did not establish a specific forecast for a 0.4% monthly increase in the index. The U.S. Bureau of Economic Analysis also scheduled the second estimate of third-quarter GDP and corporate profits for November 25 at 8:30 a.m. These data will be released before the December meeting, as traders focus on inflation signals and the rate path.