Dollar Climbs as Fed's Waller Backs a December Hike; Euro Falls to About $1.11

The dollar extended its gains on Wednesday, 11 November, as Federal Reserve officials responded to Tuesday's hot October inflation report. The euro fell about 0.65% to around $1.11, its lowest level since May 2025, and the dollar rose to its strongest level in more than two months against the yen, close to 160. The dollar index finished near 102.2.

Futures markets now see a December rate hike as very likely. Estimates of the probability of a 25 basis point move range from about 87% to 92%, up from roughly 70% a month ago.

What happened

• Waller turned hawkish. Fed Governor Christopher Waller backed a 25 basis point hike in December and said a 50 basis point move could be considered.
• Logan wants more. Dallas Fed President Lorie Logan called for at least two more increases.
• The inflation trigger. October CPI rose 0.4% month on month against a 0.3% forecast, with core inflation at 0.3% against 0.2% expected.
• Bonds sold off on Tuesday. The 10-year Treasury yield rose about 14 basis points to just under 5%, and the 2-year yield jumped about 18 basis points to around 4.74%. Short-term yields had their biggest one-day rise in 19 months. A 10-year auction drew the weakest demand since early June. US bond markets were closed on Wednesday for Veterans Day.
• Gold fell. Gold dropped to around $4,000–4,040 an ounce as rising real yields made it less attractive.

Why it matters for traders

• The Fed is hiking, not cutting. A Fed that is raising rates usually means a stronger dollar, tighter global financial conditions and pressure on high-valuation assets.
• Emerging markets feel it. A stronger dollar and higher US yields can pull money out of markets like India and Pakistan. Their currencies and foreign flows deserve close attention.
• Yen intervention risk. Japanese officials have stepped in near 160 per dollar before. Traders shorting the yen should expect sudden reversals.
• Euro-area spillover. A weaker euro helps European exporters but imports inflation, which complicates the ECB's choices.

What to watch

1. Treasury yields when trading resumes, and whether the 10-year breaks above 5%.
2. US retail sales and producer prices later this month.
3. More Fed speakers on whether a 50 basis point hike is a serious option.
4. Japan's Ministry of Finance if USD/JPY moves above 160.

Educational content, not investment advice. Practise forex-sensitive trades risk-free in the Trading Titans paper trading app.