Dollar holds near 19-month high, yen tests 160

The dollar held close to a 19-month high on Friday, Nov. 13, in Asian trading. It was on track to finish a week of gains as traders bet the Federal Reserve could deliver a larger-than-usual rate hike next month. The rally pushed the Japanese yen back toward 160 per dollar, a level that has put traders on alert for intervention from Tokyo, Reuters reported.reuters.com

The U.S. Dollar Index stayed at its highest level since April 2025. Two-year Treasury yields rose 34 basis points over two sessions, their sharpest two-day rise in three and a half years, according to Reuters. Yields climbed after President Donald Trump said the U.S. does not need a deal with Iran.reuters.com

Hawkish Fed Reprices Rate Path

The repricing began after October consumer prices rose 0.4% from September, above the 0.3% economists expected, Investing.com reported. Fed officials then warned that inflation remains stubbornly high, and some said they were open to a 50-basis-point increase if price pressures don't ease. Fed Governor Christopher Waller said he planned to back a quarter-point hike at the Dec. 8-9 meeting but would consider a larger move if core CPI came in at 0.3% or more, Reuters reported.newsobserver.com+1

Traders now see a 14.5% chance of a half-point hike in December, up from zero a week ago, according to CME Group's ↘ 0.12% FedWatch tool, as cited by Reuters. Goldman Sachs The Goldman Sachs Group, Inc. ↘ 1.43% and some other brokerages now expect another hike early next year on top of one in December, Reuters said.fidelity.com+1

Tokyo on Alert as Yen Weakens

On Thursday the yen briefly broke through 160 per dollar for the first time since Sept. 2, Investing.com reported. The USD/JPY pair was little changed early Friday, near the yen's weakest level since early September. Finance Minister Satsuki Katayama said the government will respond appropriately to currency volatility, per Reuters. On Thursday, top currency diplomat Atsushi Mimura warned that it was "too early to forget" this summer's intervention, Reuters reported.ca.finance.yahoo.com+2

Euro and Aussie Lag

EUR/USD stayed near its lowest level since April 2025. The euro was down 0.8% for the week, which would be its largest weekly loss since late September. The Australian dollar, AUD/USD, has fallen about 2.5% over the past month, the weakest of the G10 currencies, Reuters reported.reuters.com

Investors are also watching tech stocks after Nvidia ↘ 4.34% CEO Jensen Huang's departure. "If we do see a further sharp selloff in equity markets, that could be a negative for the US dollar," said Carol Kong, currency strategist at Commonwealth Bank of Australia. She added that if Fed speakers next week give more support for a 50-basis-point hike, "there's further upside in the dollar too," Reuters reported.reuters.com