Dollar Rallies on ECB Rate Hike, Strong US Inflation Data

The dollar strengthened across major currencies in New York foreign exchange trading on August 10. The European Central Bank (ECB) implemented its second rate hike of the year, raising the policy rate by 0.25% as widely expected.

Despite this move being already priced into the market, the euro fell against the dollar immediately after the announcement, declining 0.19% to $1.1612 per euro.

The primary driver of dollar strength was the August US Producer Price Index (PPI) released on the same day, which accelerated from July to 5.4%, exceeding market forecasts.