USD AI Market Pulse, Thursday, 12 November 2026
JAFX AI’s read of the news on USD (US dollar), as it stood at the end of the day: read at 23:57 UTC.
Bias: bullish
USD firm near 19-month highs after a hot October CPI. DXY is consolidating below the 103.08 peak into Friday's PPI, with a 25bp December Fed hike fully priced and some 50bp talk.
DXY hit a fresh year-to-date high of 103.08, back to April 2025 levels, then eased to around 102.80 as the rally cooled ahead of more Fed speakers. Jobless claims were a touch soft (200K vs 195K) and existing home sales fell 5.5%, but neither dented the hawkish Fed repricing. EUR/USD hit an 18-month low near 1.1066 and GBP/USD a four-week low around 1.3250. Silver dropped over 3% to around $50.15.
The past week
The week turned on the October CPI beat (Nov 10). Fed funds futures moved to fully price a December hike plus follow-through into January, and a chorus of Fedspeak reinforced it. Higher front-end real yields drove broad USD gains: USD/CHF and USD/CAD reached one-month highs and NZD/USD sits near its 0.5527 YTD low. The 10y UST bounced off 4.81% support to challenge its 50-DMA.
The bigger picture
The Fed is in a renewed tightening cycle on repeated inflation shocks, and policy divergence against the ECB, BoC and RBNZ favours the dollar. Iran-war blockade risk and fading worries about political interference at the Fed add safe-haven and credibility support.
Positioning
A 25bp December hike is fully discounted and more tightening is priced into January. An in-line PPI adds little, and the extra lift needs a hot print that pushes the 50bp debate. BBH flags the rally as stretched versus rate differentials, so a soft PPI risks a sharper positioning-driven pullback than the data alone would justify, even if the December hike stays priced.
Scenarios it set out
- Core PPI YoY above 5% and/or core MoM at 0.4% or higher (f/c 0.3%) Feeds 50bp-December talk and front-end yields jump. DXY likely retakes 103.08 and eyes 103.10/103.50, EUR/USD tests the 1.10 handle, and the 10y presses the 5.05% resistance.
- PPI in line (headline 0.4% MoM / 6.6% YoY, core 5% YoY) Confirms the 25bp hike already priced, so impact is limited. DXY likely chops in a 102.80–103.08 range, with direction handed to Bowman and Daly later in the session.
- Core PPI MoM at 0.2% or lower and headline below 6.6% YoY Undercuts the 50bp narrative and stretched USD length unwinds. DXY likely slips below 102.80, EUR/USD rebounds toward the 1.1110 200-week MA, and silver and gold get relief. The December hike should still stay largely priced.
What it said to watch
- DXY 103.08 YTD high vs the 102.80 pullback area; 103.10/103.50 cited as bull targets
- EUR/USD 1.1066 low and the 1.10 level (SocGen: slippery slope below it)
- US 10y yield: 4.81%–5.05% consolidation band, with 5.16–5.18% and 5.36% above
- USD/CAD 1.4200 support / 1.4300 resistance; NZD/USD 0.5527 YTD low
- Fedspeak (Bowman, Daly) for endorsement of back-to-back or 50bp hikes
- Real-wage and claims trend as a cap on 50bp pricing (BBH, UBS)
Risk ahead, as it saw it
US PPI Fri 13 Nov 13:30 UTC (core YoY f/c 5%, core MoM 0.3%, headline MoM 0.4%, YoY 6.6%). Then Fed's Bowman 15:50 UTC, Daly 17:00 UTC and Jefferson Sat 00:00 UTC. Next week: Empire State (Mon 13:30 UTC), Williams (Mon 14:05 UTC) and Musalem (Tue 12:30 UTC).