Dollar Gains as ECB Raises Rates Amid Oil Price Surge

The US dollar strengthened against major currencies on Thursday after the European Central Bank (ECB) raised interest rates by 25 basis points for the second time this year.

Market expectations were met, but traders are concerned about the economic impact of future hikes aimed at taming inflation. The euro dropped 0.19% to $1.1612 against the dollar immediately after the decision.

The US dollar index rose 0.28% to 99.06, while oil prices surged 6.3% to settle at $107.63 a barrel following concerns about disruptions to Red Sea shipping.

Analysts point out that US producer prices have driven the dollar's gains, reinforcing expectations of a Federal Reserve rate hike next week.