FX.co ★ Dollar Holds Gains on Hawkish Fed Bets

The US dollar index hovered just below 103 on Thursday after climbing more than 1% over the previous two sessions, marking its highest level since April 2025 amid mounting expectations of additional Federal Reserve rate hikes. The advance followed October inflation data that exceeded market forecasts and was reinforced by increasingly hawkish comments from Fed officials.

Fed Governor Christopher Waller indicated that a 50-basis-point rate increase in December may be warranted, while Dallas Fed President Lorie Logan signaled support for at least two more 25-basis-point hikes as inflationary pressures persist. Futures markets now assign roughly a 91% probability to a rate rise next month, with investors also pricing in the risk of further tightening in January and possibly April.

Investors are now turning their attention to Thursday’s reports on initial jobless claims and existing home sales for additional clues on inflation dynamics, labor market strength, and the broader economic outlook.