Dollar Holding Onto the Week’s Gains
November 13, 2026
Speculation is in the air that monetary policies will be tightening, and that’s helping the dollar, whose rates already enjoy a premium in many cases. The Federal Reserve is universally expected to lift its 3.75-4.00% federal funds target in December, and market players see a small but not insignificant risk that the hike might exceed 25 basis points in size. It’s not even mid-November, and already several central banks have lifted their interest rates this month including those in the U.K., Mauritius, Australia, Serbia, Moldova, the Czech Republic, Armenia, Sweden and, most recently, Peru. This wave of tightenings by other central banks amid lessening patience in a timely resolution of the Middle East war and substantially lower global energy costs reflects the anticipation of more aggressive Fed tightening but in turn augments the incentive of Fed officials to do what is expected.
The U.S. release of producer prices this morning provided some respite but only because the data slightly undershot analyst forecasts. Overall producer price inflation still accelerated another 0.2 percentage points to 6.5%, a 47-month high. That’s more than double January’s 3.1% reading, not to mention the low of +0.3% in June 2023. Core PPI and producer price inflation excluding trade as well as food and energy were respectively unchanged at 5.0% and 0.1 percentage point lower at 4.9% versus their 2023 low points of 1.8% and 2.5%.
The dollar is now a bit lower than before the PPI release but still winding up the week with sizable advances. Overnight dollar highs had reached a 19-month high of $1.1044 against the euro and JPY 160.19 against Japan currency, which elicited a renewed intervention threat from a high Japanese official. Half an hour after the PPI report, the U.S. currency was still sporting a 0.4% overnight rise against the Israeli shekel. Since late August, the dollar has risen 8.2% against both the shekel and Polish Zloty and by 4.3% versus the Indonesian rupiah. Bitcoin’s price has fallen 3.0% today and 20% over the past seven weeks.
Global sovereign debt assets have experienced a difficult Friday session with little post-PPI relief. The ten-year U.S. Treasury yield is still up 2 basis points at 5.14% and just over a percentage point above its year-earlier level. Other 10-year yield increases today amount to six basis points in France, five bps in the Netherlands and Greece, four bps in Germany, Italy and the U.K., and three bps in Spain. Earlier in the day, yields in Asia closed higher by nine basis points in Singapore, eight bps in Australia, seven bps in Japan and five bps in India and South Korea.
Asian equity markets closed today up 1.4% in Taiwan and 0.5% higher in Japan but also down 1.6% in Hong Kong and 1.0% in South Korea. European stock exchanges are narrowly mixed currently, while U.S. futures indication just prior to the opening bell were in the red.
A second estimate of third-quarter Euroland GDP growth (initially reported on October 30) was left unrevised and showing gains to 0.4% from the second quarter and a 5-quarter year-on-year high of 1.3%. The member country individual figures also were unchanged from those announced two weeks ago, including quarter-on-quarter changes of 5.5% in Ireland, 0.6% in the Netherlands, Spain and Estonia, 0.5% in Finland, but just 0.2% in Germany, 0.0% in Italy and -0.1% in France. Growth figures for a few more Eastern European economies that were not available at the time of the initial report include Slovakia (+0.1% on quarter and 0.5% on year), Bulgaria (+0.6% on quarter and 2.5% on year), Poland (+0.8% on quarter and 3.6% on year), Cyprus (+0.5% on quarter and 3.1% on year), and Romania (+2.1% on quarter 0.8% on year). Unlike the U.S. data convention, the quarterly changes are not expressed at an annualized rate, that is raised to the fourth power.
Employment growth within the euro area during the third quarter stagnated at zero percent. Compared to 3Q 2025, jobs grew only 0.4%. The joint currency bloc experienced a much larger-than-expected EUR 10.3 billion trade deficit in September, flipping from a 13.5 billion euro non-seasonally adjusted surplus in September 2025. The year-to-date trade balance in such times swung to a EUR 36.5 deficit from a EUR 102.2 billion surplus over the first nine months of 2025 as import growth of 9.2% was almost four times greater than the 2.4% rise in exports.
President Trump’s latest pronouncement on the war against Iran is that he is now disinterested in negotiating a peace deal, and that encouraged the Brent and WTI prices of crude oil to rise so far today by 1.0% and 0.7%.
As noted above, the Central Reserve Bank of Peru late yesterday became the latest monetary authority with an increased policy interest rate. Such was increased by 25 basis points to 4.50%. The decision ended a 14-month stretch without any change in the rate and constitutes the first increase since January 2023. A campaign of 14 cuts began in September 2023 from a peak of 7.75%. To quell speculation that yesterday’s rate hike might be the start of a long and extensive uptrend, the BCRP Board’s released statement states explicitly that “this decision does not necessarily imply the beginning of a cycle of successive reference rate increases.” With total and core consumer price inflation at an above target 5.3% and 4.6%, the action is justified as a “strong supply shocks, rising inflation expectations, and robust domestic demand.”
Other reported data today included
- A 2-month low in New Zealand’s manufacturing PMI, which at 54.6 still connotes a decent pace of improving activity.
- The second contraction of new yuan loans in China in 3 months. Such fell CNY 100 billion. In July, a record CNY 340 billion decline had been experience. On-year growth in China’s M2 stock of money meanwhile slowed further to 7.1% in October.
- The combined Swiss producer price and import price index jumped 0.9% last month. The year-on-year change was also 0.9% and the most positive in 42 months. Whereas domestic producer prices were 0.5% lower than in October 2025, import price inflation accelerated to 4.3% from 0.8% in September.
- In October, CPI inflation accelerated to a 33-month high of 3.1% in Finland from 2.5% in September and -0.2% early this year.
- Alternatively, CPI inflation last month edged down to a 22-month low of 3.0% in Slovakia and to a 2-month low of 3.0% in Poland.
- GDP in Hong Kong grew 1.9% on quarter and 5.2% year-on-year in 3Q. The 5.1% pace of growth over the first three quarters exceeds growth of 3.5% in 2025 and 2.6% in 2024.
- Turkey’s current account deficit through September was 46% wider than a year earlier.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Euroland GDP and employment growth, Swiss PPI, U.S. producer prices
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