US Dollar Holds Near 18-Month High Against the Euro as Fed Hike Bets Rise
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The US dollar stayed strong on Monday, November 9, 2026, holding close to its highest level against the euro in about a year and a half. The dollar index, which tracks the dollar against six major currencies, was steady at 102.20 after jumping about 0.7 percent on Friday. The move followed strong US jobs data, which pushed traders to raise their bets that the Federal Reserve will raise interest rates again on December 9.
What happened
The dollar surged on Friday after the October jobs report showed employers added 165,000 jobs and the unemployment rate fell. Strong jobs data usually supports higher interest rates, because a hot job market can keep inflation high. Traders now see about a 79 percent chance of a Fed rate hike on December 9, up from about 71 percent a week earlier, according to the CME FedWatch tool.
The euro edged up 0.1 percent to $1.11485 on Monday, after falling 0.7 percent on Friday to $1.1132, close to its weakest level since May 2025. The Australian dollar added 0.3 percent to $0.6875, after tumbling more than 1 percent on Friday to its lowest since March 31. The dollar eased 0.2 percent against the yen to 158.185, after a 0.6 percent jump on Friday.
New Zealand’s dollar rose 0.4 percent to $0.5557, bouncing back from a seven-month low. Weekend elections in New Zealand were too close to call, with Prime Minister Christopher Luxon’s National Party and its partners holding 67 seats in the 131-seat parliament, just one more than the 66 needed for a majority. Nearly 400,000 votes, about 15 percent of the total, still need to be counted, and official results are not due until November 27.
Fed officials added to the case for a hike on Friday. New York Fed President John Williams said US growth has stayed remarkably resilient, but inflation is too high and must be brought back to 2 percent. San Francisco Fed President Mary Daly said the Fed will likely still need to raise rates further, even with the painful sell-off in tech stocks.
Why it matters for beginners
A strong dollar affects more than currency traders. When the dollar rises, imports into the US tend to get cheaper, which can help cool inflation, but US exports become more expensive for buyers abroad, which can hurt American companies that sell overseas. For beginners, the key link is interest rates. Higher expected rates tend to support the dollar, because investors move money toward assets that pay more interest.
The dollar’s strength also matters for your investments. A rising dollar can weigh on gold and on stocks in other countries, because their earnings are worth less when converted back into dollars. If you hold a global index fund, currency moves are one reason its value can shift even when the companies inside it do nothing wrong.
The New Zealand result is a reminder that politics can move currencies too. When an election leaves no clear winner, traders often wait for the final count before making big bets, and that uncertainty can push a currency around in both directions.
What to watch next
The next big test is US inflation data for October, due on Tuesday, November 10. If inflation comes in hotter than expected, bets on a December hike could rise further and the dollar could strengthen again. If it cools, the opposite could happen. The Bank of Canada will also release the minutes from its latest meeting on Tuesday, which may give clues about its next move after it raised rates to 2.50 percent.
Watch the Fed meeting on December 9. Markets now see a hike as likely, but one soft inflation report could change that picture quickly. Also watch the final New Zealand election results on November 27, which will settle who governs the country.
FAQ
What is the dollar index?
The dollar index measures the value of the US dollar against six major currencies, including the euro, the yen, and the pound. When the index rises, the dollar is getting stronger overall. When it falls, the dollar is weakening.
Why does strong jobs data push the dollar up?
Strong hiring can keep wage growth and inflation high. That makes traders expect the Fed to keep rates higher for longer, or raise them further. Higher rates attract money into dollar assets, which lifts the dollar.
Does a strong dollar help or hurt beginners?
It depends. A strong dollar can help bring down the price of imported goods, which is good for shoppers. But it can hurt US exporters and the value of overseas investments. For most beginners, the main thing to watch is what it signals about interest rates, because rates affect mortgages, savings, and stock prices.
What are Fed rate hike bets?
Traders buy and sell contracts based on what they think the Fed will do. Tools like CME FedWatch turn those prices into a percentage chance of a rate move. A 79 percent chance means markets think a hike is likely, but not certain.
Sources
Reuters, US dollar holds onto payrolls gains, NZ dollar rises after election, November 9, 2026: https://srnnews.com/us-dollar-holds-onto-payrolls-gains-nz-dollar-rises-after-election/
Morningstar (Dow Jones Newswires), Week Ahead for FX, Bonds: US Inflation Data Could Give Clues on Rate-Hike Prospects, November 8, 2026: https://www.morningstar.com/news/dow-jones/20261108626/week-ahead-for-fx-bonds-us-inflation-data-could-give-clues-on-rate-hike-prospects
This article is for general information and education only. It is not legal or financial advice.
