Today’s Market Outlook November 11, 2026 Dollar extends gains after stronger-than-expected US CPI; USD/JPY tests 159 a

November 11, 2026

Dollar extends gains after stronger-than-expected US CPI; USD/JPY tests 159 as the US bond market closes

Market overview

USD/JPY rose to 158.96 in Tokyo, edging above the October 14 high of 158.95. It fell back to 158.71 without reaching 159, then recovered into the 158.90s early in London.

Dollar buying against the euro and pound has continued after Tuesday’s stronger-than-expected US CPI and comments from Fed officials. EUR/USD fell to 1.1140, while GBP/USD extended its decline to 1.3318. USD/JPY’s advance has been modest, but the dollar remains strong against major currencies.

The US bond market is closed tonight for Veterans Day. With fewer fresh signals from US yields, the key questions are whether USD/JPY can absorb selling just below 159 and whether dollar buying against European currencies continues into the New York session.

US CPI and the December FOMC

October US CPI, released Tuesday, came in above market expectations for both headline and core inflation.

• Headline CPI: +0.4% month over month, versus +0.3% expected and +0.6% previously

• Core CPI: +0.3% month over month, versus +0.2% expected and +0.3% previously

Headline inflation slowed from the previous reading, but core inflation held steady instead of slowing as expected. Core CPI reached the +0.3% level that Fed Governor Christopher Waller had cited as a possible threshold for considering a larger rate increase. As a result, some market participants are now considering a 0.50-percentage-point hike at the December meeting.

After the CPI release, short-term interest-rate markets priced in an almost certain December rate hike, while the probability of a larger increase rose to around 11%. Fed Vice Chair Michelle Bowman pointed to persistent inflation but stopped short of explicitly endorsing a rate hike. Whether the dollar’s gains continue will depend not only on expectations for a standard-sized increase, but also on whether markets begin pricing in a larger hike or further increases beyond December.

USD/JPY

The first resistance zone is 159.00–159.08. The 100-day moving average is at 159.00, the September 24 high is at 159.04, and the upper Bollinger Band is at 159.08.

A move to 158.96 alone is not enough to conclude that USD/JPY has broken out of the range around 157–159 that has held since late October. If the pair clears 159.04 and holds above 159, the next upside level is around 159.60.

On the downside, the 200-day moving average near 158.70 is close to the low of 158.67 recorded early in Tokyo. If the pair falls below this area and cannot recover into the 158.70s on a rebound, the Ichimoku cloud top near 158.42 may come into focus.

Euro and pound

EUR/USD broke below Tuesday’s low of 1.1146 and briefly fell to 1.1140. The immediate focus is whether it can recover 1.1146. If the rebound is weak, the psychological level of 1.1100 may be next.

At the same time, ECB officials Philip Lane and Joachim Nagel have expressed support for a possible rate hike in December. If comments from them or President Christine Lagarde strengthen that view, they could prompt a recovery in the euro.

GBP/USD fell from 1.3459 to 1.3312 on Tuesday and touched 1.3318 early in London today. Watch whether it breaks below 1.3312 or finds support just above 1.3300. EUR/JPY traded in the low 177s in Tokyo, while GBP/JPY was around 212. Even if USD/JPY rises, continued declines in the euro and pound against the dollar could limit gains in the cross-yen pairs.

USD/CAD

USD/CAD briefly rose to 1.4213, its highest level since October 15. As dollar strength continues after the US CPI release, the October 15 high of 1.4239 is the next level to watch. A clear break above it would bring the October 14 high of 1.4300 into view.

The OPEC monthly report is also due today. If a rebound in oil prompts buying in the Canadian dollar, it could limit gains in USD/CAD even if the US dollar remains strong against other major currencies.

Key points for overseas markets

• Whether USD/JPY breaks above 159.00–159.08 and holds there

• Whether 158.67–158.70 provides support on a pullback

• Whether EUR/USD can recover 1.1146

• Whether ECB officials’ remarks strengthen expectations for a December rate hike

• Whether recovering equities and a stronger dollar can coexist while the US bond market is closed

• How oil and the Canadian dollar react to the OPEC monthly report

Scenario outlook

The base case is that dollar strength following the US CPI report will support the market, while USD/JPY tests resistance from the upper 158s toward 159. If EUR/USD and GBP/USD make new lows and USD/JPY clears 159.04 and holds above it, that would suggest dollar buying is broadening across major currencies.

Conversely, if the euro and pound recover while USD/JPY falls below 158.67–158.70, the dollar buying seen since Tuesday may unwind, bringing 158.42 into focus. With the US bond market closed, it may be difficult to use yields to confirm the move. The key is not simply whether USD/JPY briefly reaches 159, but whether it can hold that level after a pullback.