US inflation came in above forecast, and the dollar index rose above 103. On Thursday during the Asian session, DXY reached 103.048 — a level not seen since early April 2025. Over the previous session, the index gained 0.7%.
DXY shows the dollar's exchange rate against a basket of currencies. The index is rising — meaning the dollar is strengthening against the euro, yen, pound and franc all at once.
For a trader, this is a smooth trend across the major pairs. The euro and Australian dollar are already at multi-month lows, and the yen has approached a level at which Japanese authorities previously intervened in the market.
How strong is the dollar?
As of 06:12 Moscow time, DXY was up 0.1%. The weekly score by currency is as follows:
- 1.73% — the dollar's gain against the franc over the week
- 1.00% — against the yen
- 0.88% — against the pound
- 0.69% — against the euro
- 0.39% — against the Australian dollar
Why did the dollar go up?
It all started with the US October consumer price index. From there, the chain looks like this:
- Prices rose more than expected. CPI came in at +0.4% for the month versus the expected 0.3%.
- The Fed turned more hawkish. Waller allows for a half-percentage-point rate hike in December if core inflation comes in at 0.3% or higher.
- The market bought into a hike. According to CME FedWatch, the probability of a rate hike in December is 91%.
- Bonds followed. The yield on 10-year US Treasuries returned above 5%.
What about the major pairs?
- EUR/USD — on Wednesday it fell below 1.1100 and touched 1.1092, a low since May 2025; in the morning it bounced to 1.1095
- AUD/USD — falling for the third day in a row, around 0.6840, an eight-month low
- USD/JPY — trading near 159.74, at one point it was 159.93
Where is the risk for the trend?
The market's nearest nerve is the 160 mark on the yen. At this level, Japanese authorities previously intervened in the market, and verbal warnings about intervention have already been sounded.
Intervention is a government buying its own currency to stop it from falling.
The main thing: the dollar is advancing on a broad front, but at 160 on the yen, the move is no longer decided by inflation but by Japan.
This happened at the end of July. For the first time since 1998, the US joined Japan in buying yen, and the pair went from 164 to around 155, but the yen then gave back almost all of it.
The US–Iran standoff over the Strait of Hormuz adds a risk premium. There were reports of strikes on the Iranian island of Qeshm.
What's next?
- UK — the preliminary third-quarter GDP estimate is out today, with +0.7% for the quarter expected after 0.5%
- Gold — holding below $4,000 amid a strong dollar
- December — the Fed's rate decision, dates are in the economic calendar
If you trade a currency trend, a challenge for your pairs can be set up in a couple of minutes.
Did you catch this dollar breakout?
A trend like this is not hard to trade: the direction is smooth, the levels are visible, and you don't have to invent an entry. It all comes down to notional size. 70 pips on EUR/USD in an account of a couple thousand dollars brings in an amount the size of dinner. In prop trading, account size is decoupled from the size of your savings: you pay for selection under the company's rules, pass it, and trade its notional for a share of the profit. While the dollar is trending, it's the perfect time to understand how this path works.