The dollar index touched 103.17 on Friday, its highest since April 2025. USD/JPY pressed against 160 per dollar, a line Japan has defended with yen purchases twice this year. Traders now price a 14.5% chance (as of November 13) of a half-point Federal Reserve hike in December. A week ago that chance was zero, per the CME FedWatch tool. The two-year Treasury yield jumped 34 basis points in two sessions.
The euro fell 0.1% to $1.1049, its lowest versus the dollar since April 2025. It is down 0.8% for the week, its worst week since late September, per Reuters. The Australian dollar is 2.5% lower than a month ago, the weakest G10 currency against the dollar and the only one where traders price rate cuts next year. It traded at $0.68.
The move is a repricing, not a drift. Seven days ago the market priced no chance of a half-point hike. Now it prices 14.5%.
A week of repricing
The October CPI print on November 10 set the move in motion: headline prices rose 0.4% on the month against 0.3% expected, and core prices rose 0.3% for a third straight month. Fed officials warned this week that inflation stays elevated, and some signalled openness to a half-point move, per Reuters. Beth Hammack, president of the Cleveland Fed, backed further hikes, but in smaller and more frequent steps, per Action Forex. A 25-basis-point hike in December is fully priced (as of November 11), so the debate is now 25 or 50.
November 6 closes are the October jobs-report reaction; November 13 levels are from Reuters, except sterling from the snapshot at 03:13 UTC.
| Pair | Nov 6 close | Nov 13 | Change |
|---|---|---|---|
| Dollar index (DXY) | 102.26 | 103.17 | +0.91 points (+0.89%) |
| EUR/USD | 1.1144 | 1.1049 | -95 pips (-0.85%) |
| USD/JPY | 158.43 | 159.875 | +144.5 pips (+0.91%) |
| GBP/USD | 1.3355 | 1.3234 | -121 pips (-0.91%) |
The yen touched 160.044 on Thursday, the first touch of 160 since early September. The pair fell to 159.314 within two minutes and closed at 159.834, per FXStreet data in the ForexCommand roundup, and stood at 159.875 on Friday, per Reuters. Atsushi Mimura, the finance ministry's top currency official, called the moves too rapid, per FXStreet. Finance Minister Satsuki Katayama said Japan will respond appropriately to volatility, per Reuters.
Why it matters
160 is the line where Tokyo's warnings turn into orders: Japan bought yen at 160 twice this year, per FXStreet, so a close above it tests whether the ministry acts a third time. A climbing dollar tightens conditions beyond currencies. Gold stood at $3,920.4, down 1.92%, and bitcoin at $69,969, down 5.03%, in the MarketRadar snapshot at 03:13 UTC. The dollar cooled from its last 19-month high only a day earlier, which shows how fast the repricing is running. Yields also rose after President Donald Trump dismissed the need for a deal with Iran, per Reuters. US crude added 2.55% on Thursday as attacks on Saudi energy infrastructure escalated. Carol Kong of Commonwealth Bank of Australia told Reuters that more backing for a half-point hike from Fed speakers next week would lift the dollar further.
What to watch
- US producer prices land today, the next inflation print before the December 8-9 Fed meeting.
- Fed officials speak next week; further backing for a half-point move would add to the dollar's run.
- Watch whether USD/JPY closes above 160, and whether Tokyo answers with yen purchases.
- November CPI lands December 10, one day after the December 8-9 meeting, so the meeting decides without it.
Key points
- The dollar index reached 103.17, a level not seen since April 2025. The euro fell to $1.1049, its weakest since April 2025.
- Traders price a 14.5% chance of a half-point December hike, against zero a week earlier, per the CME FedWatch tool.
- The two-year yield added 34 basis points in two sessions. It is the steepest two-day climb in three and a half years.
- USD/JPY touched 160.044 on Thursday and closed at 159.834, after the first test of 160 since early September.
- The euro is down 0.8% for the week; the Australian dollar is 2.5% lower than a month ago.
MarketRadar take
The dollar has the run of the market until the data or the Fed speakers push back. The 14.5% odds on a half-point hike are small, and a soft PPI print today would cut them fast. The test is 160 in USD/JPY: a close above it forces Tokyo to choose between its warnings and its reserves, and the 73-pip slide within two minutes of Thursday's touch shows sellers stepped in fast at the line.
