Dollar Surges as ECB Hikes Rates, PPI Data Boosts Rate-Hike Chances
The dollar rose against major currencies on Thursday after the European Central Bank raised interest rates by 25 basis points, its second increase this year.
Markets worried about the economic impact of future hikes with ECB policymakers aiming to tame inflation. The euro dropped immediately after the decision and was last down 0.19% against the dollar at $1.1612.
Eugene Epstein, head of structured products for North America at Moneycorp, said 'ECB rate hike odds have all increased so I would argue it was hawkish but I really think the main driver of the stronger dollar, which is the case across all currency pairs, is the PPI.'
The dollar strengthened 0.35% to 0.813 against the Swiss franc CHF. Markets are eyeing the U.S. CPI, which is due on Friday, and a strong reading would likely spur a dollar relief rally.