Dollar climbs as 50 bp Fed hike fears hit bonds and USD/JPY tests 159

The dollar extended its post-CPI gains through Asia and Europe as fears of a 50 basis point Fed hike spread to global bond markets. Investing.com reports that global bonds reeled on the hot US CPI print and hawkish Fed rhetoric, while USD/JPY pushed back toward 159.

The twist: the US Treasury market itself is closed. investingLive notes that Veterans Day shuts the US bond market, so cash Treasuries cannot react to the move until trading resumes.

What moved and why

In its European session wrap, investingLive described stocks rallying and the dollar climbing as the bond market sat out the post-CPI action. US futures rose as AI dip buyers returned, according to the same wrap.

The hike debate gained another voice overnight. investingLive's Asia-Pacific wrap reports that Goldman has added another Fed rate hike to its forecast. Investing.com said the dollar held its gains as Fed hike bets rose, with the yen near a six-week low.

The ECB reference rates for 11 November capture the move. EUR/USD was fixed at 1.1127, down 0.78% from the 10 November fixing. GBP/USD fell 0.86% to 1.3307, and USD/JPY rose 0.66% to 159.23. USD/CHF posted the largest change among the majors, up 1.12% to 0.8299. USD/CAD rose 0.70% to 1.4235, while AUD/USD and NZD/USD fell 0.64% and 0.79%. These are official daily fixings, not live quotes.

Yen: intervention risk back in focus

investingLive flagged that USD/JPY was "knocking on the door of 159.00 again" and warned that dollar bulls risk "poking the intervention bear". Track it on the USD/JPY chart.

Flows are mixed. Investing.com reports that BofA sees retail yen selling rising but offset by foreign inflows. Separately, Citi sees a risk of yen strength if Japanese stocks correct further, according to Investing.com.

Central banks and data in the news

• Bank of England / sterling: Investing.com says the pound edged lower as Fed hike bets and hot CPI buoyed the dollar.
• ECB: Germany's final October CPI and HICP were confirmed at 2.8% y/y, down from 3.3%, investingLive reports. The outlet adds that winter energy risks keep ECB hike bets alive. Investing.com also covers a contrarian ECB bet targeting a 2.5% deposit rate through mid-March.
• RBA: Australian investor home lending plunged 32% in Q3, according to investingLive. The outlet says this supports the case for a pause after the RBA's five hikes this year and is a modest headwind for the Aussie.
• Geopolitics: Iranian Parliament Speaker Ghalibaf told Al Jazeera that peace is Tehran's priority if Washington accepts its conditions, and that an understanding was reached with Oman on Strait of Hormuz shipping lanes, investingLive reports.

For background on why yesterday's soft 10-year sale mattered, see our sister site's explainer on how US bond auctions work.

What to watch next

1. US Treasuries reopening. investingLive says the bond market "has unfinished business" after the holiday break.
2. The 50 bp question. investingLive's day-ahead note says markets will keep assessing a possible 50 bp Fed hike after Waller put it on the table.
3. USD/JPY near 159. Any sign of Japanese intervention.
4. Iran-US talks. Further headlines on Hormuz and negotiations.
5. RBA and ECB pricing. Whether housing data and energy risks shift rate expectations.