Business · Markets · 3 hrs ago
Dollar rises as traders increase bets on a December Fed rate hike
The US dollar strengthened against major currencies on Wednesday as traders expected the Federal Reserve to raise interest rates.
US consumer prices rose more than expected in October for the third month in a row, helping drive those expectations.
Traders put the chance of a quarter-point rate hike in December at 87%, compared with about 70% a month earlier.
Comments from Fed officials also signaled concern about inflation and kept the possibility of a larger increase in view.
The euro fell to its lowest level since May 2025, while the dollar rose against the yen and Swiss franc.
Higher expected US rates are supporting the dollar, while some analysts also point to demand for safer assets amid the US-Israeli war on Iran.
The Fed's next decision is due in December, though the sources do not say what it will decide.
The US dollar rose against major currencies on Wednesday as traders increased bets on a Federal Reserve interest-rate hike in December.
US consumer prices rose more than expected in October for a third consecutive month, and Fed officials’ comments signalled concern about high inflation.
Traders put the chance of a 25-basis-point December rate increase at 87%, up from about 70% a month earlier, according to CME’s FedWatch Tool.
The dollar index reached its highest level since April 2025, while the euro fell to its lowest since May 2025.
- Who
- The US dollar and traders in currency markets. Traders increased their bets on a Federal Reserve rate hike.
- What
- The dollar strengthened against major currencies. Markets raised expectations of a December rate increase.
- When
- Wednesday, November 11, 2026. The reports said the October inflation data and Fed comments came a day earlier.
- Where
- In global currency markets.
- Why
- US inflation was higher than expected for a third consecutive month, and Fed officials made hawkish comments.
This story does not have two clearly opposing sides.
US consumer prices rose more than expected in October for a third consecutive month.
The dollar strengthened against major currencies as traders increased bets on a December Fed rate hike.
- December rate-hike probability
- 87% for a 25-basis-point increase, according to CME’s FedWatch Tool
- Dollar index
- 102.90, up 0.68% in the latest Reuters report
- Dollar against yen
- 159.84 yen, up 0.69%
- Euro against dollar
- $1.11, down 0.65%
- Inflation trend
- US consumer prices exceeded expectations for the third consecutive month in October
4 sources
What people are saying
We've got broad-based strength in the dollar largely underpinned by a hawkish shift in Fed fund rates expectations driven by the hot October CPI print but amplified as well by recent comments by Fed officials
The dollar has continued to have some broad-based support on the expectation that the Fed would be more aggressive in their monetary tightening