Forex Today: US producer inflation data in focus as markets remain cautious

13 November, Friday: Key market developments

The US Dollar (USD) Index is consolidating above 103.00. Tracking the greenback against six major currencies, the index ended a three-day advance at its highest since April 2025. Friday's European calendar includes September Trade Balance figures and revised third-quarter Gross Domestic Product (GDP) growth data. The US Bureau of Labor Statistics (BLS) will release October's Producer Price Index (PPI) later in the day.

US Dollar Performance This Week

Against the major currencies listed below, the US Dollar (USD) recorded its strongest performance this week versus the Swiss Franc. The table sets out the percentage changes for the week.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.66%	0.84%	0.91%	0.96%	1.00%	0.34%	1.94%
EUR	-0.66%		0.19%	0.28%	0.32%	0.45%	-0.30%	1.29%
GBP	-0.84%	-0.19%		0.08%	0.11%	0.26%	-0.50%	1.09%
JPY	-0.91%	-0.28%	-0.08%		0.03%	0.02%	-0.56%	0.96%
CAD	-0.96%	-0.32%	-0.11%	-0.03%		0.02%	-0.64%	1.01%
AUD	-1.00%	-0.45%	-0.26%	-0.02%	-0.02%		-0.75%	0.75%
NZD	-0.34%	0.30%	0.50%	0.56%	0.64%	0.75%		1.61%
CHF	-1.94%	-1.29%	-1.09%	-0.96%	-1.01%	-0.75%	-1.61%

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. Selecting the US Dollar on the left and following its row across to the Japanese Yen, for instance, gives the percentage change for USD (base)/JPY (quote).

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

With no high-impact economic releases on Thursday, risk aversion helped the USD extend its gains against other currencies. Hawkish remarks from Federal Reserve (Fed) officials also pushed the benchmark 10-year US Treasury bond yield above 5%, providing additional support for the currency.

Oil edged up after US President Donald Trump said in a Thursday Truth Social post that they don't "need a deal with Iran." West Texas Intermediate (WTI) rose more than 2% per barrel on the day. Meanwhile, Wall Street's main indices faced mild selling pressure after the opening bell. This followed news that Nvidia's (NVDA) longtime CEO and co-founder Jensen Huang was resigning as CEO amid board scrutiny over several affairs. US stock index futures are slightly lower early on Friday.

Fed's Williams highlights persistent inflation risks despite US economic resilience

A 7/10 FXS Speechtracker score, against a 6.1/10 baseline, placed New York Fed President John Williams' speech modestly above its historical average for hawkishness. Williams described a resilient, robust US economy that is gaining strength without overheating. By stressing that inflation remains “stubbornly persistent and elevated” and that the central bank “still has work to do” to establish the appropriate monetary policy stance, he conveyed a data-dependent approach with a clear bias towards tightening.

San Francisco Fed President Mary Daly likewise highlighted upside inflation risks from technology-driven momentum and sticky services prices, although AI is currently making only a modest contribution to inflation. Her emphasis on a “bias” towards additional tightening, comfort with a September rate increase and assessment that inflation pressures are “up, not down” signalled a Fed stance focused on reducing inflation. That priority remains despite recognition that future AI-led productivity improvements could act as a disinflationary force.

According to National Bank of Canada strategists, the Dollar “remains supported by persistent inflation and the prospect of further Fed tightening.” In their assessment, “following October’s pause, another firm CPI report reinforces our expectation for tighter policy before year-end,” while a “deterioration in global risk appetite could provide further support through safe-haven demand.”

Gold fell more than 2.5% on Thursday, hitting its lowest since October 2025 near $3,850. Friday's corrective rebound still leaves the precious metal below $4,000.

EUR/USD is recovering above 1.1050 during European trading. Despite the rebound, it is still heading for a weekly decline.

GBP/USD is down more than 0.8% over the week. Following three straight daily declines, the pair is trading in a narrow sideways range below 1.3250 on Friday.

USD/JPY climbed above 160.00 during Asian trading, reaching its highest since early September before pulling back sharply ahead of the European session. It stood at 159.80 at the time of writing, essentially flat on the day. On Friday, Japanese Prime Minister Sanae Takaichi said the government was maintaining close contact with US financial authorities over the currency market. She also reaffirmed officials' commitment to preserving orderly foreign exchange trading.

Inflation: Key Questions Answered

How is inflation defined?

The increase in prices across a representative basket of goods and services is measured by inflation. Headline inflation is generally reported as a percentage change, both month-on-month (MoM) and year-on-year (YoY). The core measure removes more volatile components, including food and fuel, whose prices can shift with geopolitical developments and seasonal factors. Economists concentrate on core inflation, which is also the measure targeted by central banks. Their mandate is to maintain inflation at a manageable rate, typically around 2%.

What does the Consumer Price Index (CPI) measure?

Changes in the prices of a basket of goods and services over time are tracked by the Consumer Price Index (CPI). The figures are normally reported as percentage changes month-on-month (MoM) and year-on-year (YoY). Central banks target Core CPI because it strips out volatile food and fuel components. A reading above 2% generally leads to higher interest rates, while a reading below 2% tends to have the opposite effect. Higher rates support a currency, so rising inflation typically strengthens it. Falling inflation usually produces the reverse outcome.

How does inflation affect currency values?

A country's currency tends to appreciate when inflation is high and weaken when inflation is lower, a relationship that may appear counter-intuitive. The reason is that central banks normally respond to elevated inflation by raising interest rates. Those higher rates attract additional capital from global investors seeking an attractive return on their funds.

What links inflation to Gold prices?

Historically, investors sought Gold during periods of high inflation for its ability to preserve value. They still often buy the metal as a safe haven during severe market turmoil, but this is not the usual response in most circumstances. High inflation prompts central banks to raise interest rates to contain price pressures. For Gold, higher rates are a negative: they raise the opportunity cost of owning the metal rather than an interest-bearing asset or a cash deposit. Conversely, lower inflation tends to support Gold by bringing interest rates down and making the precious metal a more attractive investment alternative.