Friday concluded a week dominated by renewed expectations for aggressive Federal Reserve tightening.
The dollar remained close to its highest level in 19 months and was positioned for its strongest weekly advance in approximately two months.
U.S. two-year Treasury yields had risen roughly 32–34 basis points during the week, reflecting the combination of stronger inflation, resilient employment and increasingly hawkish Fed commentary.
Geopolitical developments added another source of support. President Trump indicated that the United States did not require an agreement with Iran, raising concerns that Middle Eastern tensions could continue threatening oil supplies.
Higher energy prices reinforced inflation expectations and strengthened the argument for further monetary tightening.
The dollar index traded near 103.2, while the yen hovered around 160 and the euro approached its weakest level since April 2025.
Major Pairs Analysis
USD/JPY
Technical Analysis: USD/JPY traded near 159.7–160.0, putting the pair directly against a major psychological resistance level.
The broader technical trend remained bullish, supported by a sequence of higher lows and renewed dollar demand. However, the risk of intervention made the 160 region particularly sensitive.
A sustained move above 160 could encourage further buying, while a sharp rejection could trigger profit-taking toward 158–159.
Fundamental Analysis: The U.S.-Japan interest-rate differential continued favoring the dollar.
However, Japanese Finance Minister Satsuki Katayama warned that authorities would respond appropriately to excessive currency volatility.
Japan’s previous large-scale intervention meant traders could not assume that yen depreciation would continue without official resistance. Reuters
EUR/USD
Technical Analysis: EUR/USD traded around 1.1030–1.1065 during Friday’s session, approaching its weakest levels in approximately 19 months.
The technical structure remained bearish, with 1.10 emerging as the next major psychological support.
A recovery above 1.11 would be required to meaningfully improve short-term momentum.
Fundamental Analysis: The euro continued struggling against higher U.S. yields and expectations for additional Federal Reserve tightening.
Although lower energy costs could improve Europe’s growth outlook, the relative strength of U.S. monetary-policy expectations remained the dominant driver.
The euro was also heading for its fourth consecutive weekly decline. MarketScreener
GBP/USD
Technical Analysis: GBP/USD traded near 1.3230, remaining close to its recent lows. The pair was heading for its largest weekly decline since September.
The 1.32 region remained important support, while a sustained recovery above 1.33 would improve the short-term outlook.
Fundamental Analysis: Sterling remained under pressure despite expectations for another Bank of England rate increase.
Markets placed the probability of a December BoE hike at approximately 85%, supported by relatively resilient UK economic activity.
However, stronger U.S. inflation and rising Treasury yields continued favoring the dollar. Investors were also awaiting UK inflation figures for additional guidance on the BoE’s next decision. Reuters
Market Outlook
The November 9–13 trading week demonstrated how quickly currency markets can shift when inflation expectations change.
Monday began with dollar weakness as hopes for a diplomatic breakthrough with Iran improved global risk sentiment.
Tuesday’s stronger-than-expected U.S. inflation report reversed that trend, while subsequent Federal Reserve commentary strengthened expectations for December tightening.
By Friday, the dollar was near a 19-month high and USD/JPY was approaching a level that had previously prompted intervention.