Euro Could Struggle to Sustainably Reverse Weakness

A facts-only brief, written by a local AI model from this article in The Wall Street Journal, November 12, 2026. It may contain mistakes, and it is not the article: the full story is at wsj.com.

The U.S. dollar index reached a 19-month high of 103.083 overnight, driven by market expectations for Federal Reserve interest rate hikes following higher-than-expected inflation data and comments from Fed Governor Christopher Waller. LSEG data indicate traders price an 88% to 90% probability of a 25 basis point increase in December, with a smaller chance of a 50 basis point move. This strength pressured the euro to an 18-month low of $1.1065 and pushed the Japanese yen toward the sensitive 160 level, where MUFG and State Street analysts suggest intervention risks remain elevated.

Background

• Convera’s market insights team attributes the euro’s weakness to political turmoil in France and geopolitical tensions between Ukraine and Russia, noting that near-term rallies may remain corrective.
• ING’s Francesco Pesole states that a decisive drop below $1.10 would likely require markets to seriously entertain a 50 basis point Fed hike, a scenario he views as unlikely at present.
• KBC Bank analysts note that the dollar’s rapid appreciation could continue, while the euro has fallen below key support levels.
• Citi’s Alex Saunders argues that bitcoin is not yet functioning as digital gold because its correlation to equities remains too high, despite a 16% year-to-date decline.

Read the full article at wsj.com

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