The US dollar strengthened against major currencies on Wednesday, November 11, reaching its highest level in approximately four weeks as investors increased bets on further monetary tightening by the Federal Reserve.
The US Dollar Index (DXY), which measures the currency against a basket of six major peers, rose to approximately 102.5 after gaining 0.5% in the previous session.
The advance followed stronger-than-expected US inflation data and comments from Federal Reserve officials indicating that additional interest rate increases may be necessary to contain persistent price pressures.
Inflation Reinforces Expectations of Higher Rates
US consumer prices increased 0.4% in October, exceeding economists’ expectations of 0.3%, while core inflation, which excludes food and energy, rose 0.3%.
The figures intensified concerns that inflation remains elevated despite previous monetary tightening.
Federal Reserve Governor Christopher Waller said a 50-basis-point rate increase in December should be considered if underlying inflation continued to accelerate.
Dallas Fed President Lorie Logan also supported additional monetary tightening, indicating that at least two further quarter-point increases could be necessary.
The statements reinforced expectations that the central bank may adopt a more aggressive approach to interest rates.
Markets Price in December Rate Increase
According to CME Group’s FedWatch tool, investors were assigning more than a 90% probability to a 25-basis-point rate increase at the Federal Reserve’s December meeting.
Some market participants were also considering the possibility of a larger half-percentage-point increase.
Expectations for additional rate hikes in January and later in 2027 have strengthened following the latest inflation figures.
Higher US interest rates generally support the dollar by increasing the potential returns on dollar-denominated assets relative to investments in other currencies.
Dollar Advances Against Major Currencies
The dollar strengthened against most major currencies, including the euro, British pound, Japanese yen and Swiss franc.
The Japanese yen approached the closely watched level of 160 per dollar, while the euro traded near $1.113.
Meanwhile, oil prices recovered from recent declines as tensions between the United States and Iran continued to influence global energy markets.
The latest currency movements reflect a shift in expectations for US monetary policy ahead of the Federal Reserve’s December 8–9 meeting.
