Dollar Hits Fresh 40-Year High as Oil Prices Soar

The U.S. dollar strengthened on Thursday, reaching a fresh 40-year high against several currencies and advancing as surging oil prices and the European Central Bank's decision to leave interest rates unchanged boosted demand for the greenback.

Brent crude futures topped $100 a barrel for the first time since May after Yemen's Houthis said they had struck two Saudi oil tankers, heightening concerns over global oil supplies and adding to inflation fears.

The ECB held its three key rates on the deposit facility, main refinancing operations, and marginal lending facility at 2.25%, 2.40%, and 2.65% respectively, in a widely expected move as oil prices had tumbled since the ECB's June decision to hike rates.

However, an escalation in tensions between the U.S. and Iran has once again boosted oil, upending inflationary dynamics. The central bank also said it would follow a 'data-dependent and meeting-by-meeting approach' to setting monetary policy.