US dollar index rises as Fed hikes outlook and CPI data looms
ITF Team2 min read
The dollar index closed at 102.11 on 11/9/2026, up 0.51%, as traders shift focus to October CPI and PPI and Deutsche Bank projects two 25‑bp Fed hikes.
Key takeaways
- The U.S. Dollar Index ended the day at 102.11, up 0.51%, on 11/9/2026.
- Deutsche Bank expects headline CPI to rise 0.20% month‑on‑month in October, down from a prior 0.65% estimate.
- Core CPI is projected to increase 0.20% month‑on‑month, versus 0.33% previously.
- The bank forecasts 25 basis‑point Fed hikes at the December 2026 and March 2027 FOMC meetings.
The U.S. Dollar Index (DXY) closed at 102.11 on 11/9/2026, gaining 0.51% as market attention moved from a strong payroll report to the upcoming October consumer price index (CPI) and producer price index (PPI) releases. Deutsche Bank’s Jim Reid and his team highlighted that the index’s rise reflects expectations of continued Fed tightening despite softer inflation prints.
Shift from payrolls to inflation data
After the non‑farm payrolls surprise earlier in the week, traders are now pricing in October CPI data due on 11/10/2026 and PPI on 11/12/2026. Deutsche Bank’s economists anticipate a headline CPI increase of 0.20% month‑on‑month, a sharp downgrade from the 0.65% they had previously modelled. The core CPI is also expected to rise 0.20%, down from 0.33% in the prior forecast.
The downgrade signals that the market is pricing a milder inflation trajectory, which could temper the pace of future rate hikes. However, the missing year‑on‑year CPI figure—due to the 2025 index not being published during last year’s government shutdown—means analysts cannot yet gauge the longer‑term trend.
Producer prices and the Fed’s rate path
Deutsche Bank projects PPI to climb 0.20% month‑on‑month, a slowdown from September’s 0.32% gain, while the year‑on‑year rate is expected to hold near 3.1%. The softer PPI aligns with the broader expectation of easing price pressures in the U.S. economy.
Despite the softer prints, the bank maintains its view that the Federal Reserve will raise rates by 25 basis points at both the December 2026 and March 2027 FOMC meetings, provided financial conditions do not tighten dramatically. This stance underscores the Fed’s commitment to a “higher‑for‑longer” policy stance.
Read also: GBP rises on USD weakness in evening market overview
Implications for major currency pairs
The dollar’s gain lifted USD/JPY lower in the early week as traders took profits after the payroll rally. A weaker yen and a modestly stronger dollar are consistent with the expectation of further Fed tightening.
Conversely, AUD/USD held near the 0.6900 level, buoyed by China’s suspension of 24% tariffs on U.S. goods and easing U.S.–Iran tensions, which offset mixed Chinese inflation data. These dynamics illustrate how geopolitical and trade developments can modulate currency moves even when the dollar is firm.
What to watch next
Key events to monitor include the October CPI release on 11/10/2026, the PPI on 11/12/2026, and the upcoming Fed speaker schedule, which could provide clues on the timing of the December rate hike. Traders should also keep an eye on the year‑on‑year CPI gap once the 2025 index is finally published.
- 11/10/2026 – U.S. CPI (month‑on‑month)
- 11/12/2026 – U.S. PPI (month‑on‑month)
- December 2026 FOMC meeting – potential 25 bp hike
- March 2027 FOMC meeting – potential 25 bp hike
Frequently asked questions
Why is the dollar index rising despite expectations of softer inflation?
The index climbed because traders still expect the Federal Reserve to deliver two 25‑basis‑point hikes in December 2026 and March 2027, and the market is pricing in a higher‑for‑longer rate stance even though Deutsche Bank forecasts lower month‑on‑month CPI and PPI numbers.
What are Deutsche Bank’s inflation forecasts for October?
Deutsche Bank projects headline CPI to increase 0.20% month‑on‑month and core CPI to rise 0.20% month‑on‑month. Producer prices are expected to climb 0.20% month‑on‑month, with the year‑on‑year PPI staying around 3.1%.
Official data sources
Related news
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- Gold near $4,100 as weak US dollar supports gains
- DXY near 102.26 as EUR/USD and GBP/USD await US CPI
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This article is compiled from international market news for information only. It is not investment advice.