Forex Today: Gold slips below $4,000 as US Dollar Index reaches new 19-month high

What is in focus for markets on Wednesday, 11 November?

Dollar strength remains the dominant market theme on Thursday, with the US Dollar Index extending its advance above 103.00 to its highest level since April 2025. Elevated inflation readings and hawkish remarks from Federal Reserve (Fed) policymakers have driven the rally. The US economic calendar for the second half of the day includes weekly Initial Jobless Claims and Existing Home Sales figures. Remarks from central bank officials will also remain under close scrutiny.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

How Has the US Dollar Performed This Week?

The US Dollar recorded its strongest gain against the Swiss Franc this week. Its percentage moves against the major currencies listed are set out in the table below.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.59%	0.69%	0.93%	1.00%	0.60%	0.22%	1.72%
EUR	-0.59%		0.11%	0.32%	0.41%	0.11%	-0.36%	1.12%
GBP	-0.69%	-0.11%		0.21%	0.29%	0.00%	-0.48%	1.01%
JPY	-0.93%	-0.32%	-0.21%		0.06%	-0.38%	-0.69%	0.73%
CAD	-1.00%	-0.41%	-0.29%	-0.06%		-0.41%	-0.79%	0.75%
AUD	-0.60%	-0.11%	-0.00%	0.38%	0.41%		-0.47%	0.92%
NZD	-0.22%	0.36%	0.48%	0.69%	0.79%	0.47%		1.51%
CHF	-1.72%	-1.12%	-1.01%	-0.73%	-0.75%	-0.92%	-1.51%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the US Dollar on the left and following that row across to the Japanese Yen gives the percentage change for USD (base)/JPY (quote) in the corresponding cell.

Revised market expectations for the Fed's rate path are supporting the USD's outperformance against its peers this week. The CME FedWatch Tool puts the market-implied probability of a cumulative 50 basis points (bps) increase in the policy rate over the next two meetings at nearly 62%, up from just 10% a week earlier. Following three successive days of gains, the benchmark 10-year US Treasury bond yield is steady near 5% on Thursday. US stock index futures, meanwhile, remain in the red despite Wednesday's gains.

Does a 25bps Fed hike offer better risk-reward? MUFG weighs in as debate gathers pace

Although recent market movements have rekindled speculation about a stronger Fed policy response, MUFG/BTMU analysts “remain sceptical of the need to hike by 50bps at this stage and suspect the majority will see the better risk-reward in going by 25bps.” Noting that “we still have another payrolls report (but no further CPI prints, although it’s the day after) before the FOMC meeting,” they warn that “a strong print plus a rebound in crude oil after the recent sharp drop would be one scenario of a possible more aggressive hike.”

Annual growth in the UK's Gross Domestic Product accelerated to 1.9% in the third quarter from 1.4% in the preceding quarter, figures released earlier in the day by the Office for National Statistics showed. The outcome was in line with market expectations. Separate UK releases showed monthly increases of 0.3% in Industrial Production and 0.7% in Manufacturing Production in September, both exceeding analysts' forecasts. Following a two-day fall of more than 1%, GBP/USD is finding some support from the positive UK figures, limiting further losses, though it remains around 1.3250, its lowest level in nearly a month.

Bank of Japan (BoJ) board member Toichiro Asada cautioned on Thursday that, with consumption lacking momentum, the central bank must consider the risk of rate increases depressing underlying inflation. USD/JPY is maintaining Wednesday's gain of nearly 0.7%, trading close to 160.00 at its strongest level since early September. Japanese data released earlier in the day showed a monthly rise of 0.7% in the Producer Price Index in October, reversing September's 0.2% decline.

The hawkish reassessment of Fed policy expectations remains a significant drag on Gold. Down more than 2.5% since the start of the week, the precious metal has touched a fresh weekly low near $3,960 during Thursday's European session.

EUR/USD remains under selling pressure below 1.1100, trading at its lowest level since May 2025.

AUD/USD is nearing 0.6800 as Thursday brings a third straight day of losses, while NZD/USD is hovering around 0.5500 following Wednesday's decline of about 0.8%.

USD/CAD is trading above 1.4250 during the European morning, taking its gain for the week to nearly 1%.

Fed questions answered

How does the Federal Reserve's role affect the US Dollar?

The Federal Reserve (Fed) sets US monetary policy with a dual mandate of maintaining price stability and promoting full employment. Adjustments to interest rates are its main means of pursuing these objectives. If prices climb too rapidly and inflation exceeds the Fed's 2% target, the central bank increases interest rates, raising borrowing costs across the economy. Higher rates make the US a more appealing destination for international investors' money, strengthening the US Dollar (USD). Conversely, inflation below 2% or an excessively high Unemployment Rate may prompt the Fed to cut interest rates to stimulate borrowing, putting pressure on the Greenback.

What is the frequency of Fed monetary policy meetings?

At eight policy meetings each year, the Federal Open Market Committee (FOMC) reviews economic conditions and decides monetary policy for the Federal Reserve (Fed). Twelve Fed officials participate in the FOMC: all seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the other eleven regional Reserve Bank presidents. Those four positions rotate, with each president serving a one-year term.

How does Quantitative Easing (QE) work, and what does it mean for USD?

When conditions become extreme, the Federal Reserve may turn to Quantitative Easing (QE), a policy designed to substantially boost the flow of credit through a stalled financial system. This unconventional measure is deployed in crises or periods of exceptionally low inflation. During the Great Financial Crisis in 2008, it was the Fed's preferred policy tool. Under QE, the Fed prints additional Dollars to purchase high-grade bonds from financial institutions. The US Dollar typically weakens as a result.

How does Quantitative Tightening (QT) work, and what is its effect on the US Dollar?

As the opposite of QE, Quantitative tightening (QT) entails the Federal Reserve halting bond purchases from financial institutions. It also refrains from reinvesting the principal repaid on its maturing bond holdings in new bonds. This process generally supports the US Dollar's value.