Forex
ECB Rate Hike Fails to Stem Dollar's Rise Amid US Inflation Concerns
The European Central Bank (ECB) raised interest rates and expressed optimism about the economy, but this move failed to boost the Euro against the US dollar.
The ECB's decision to increase the deposit rate from 2.25% to 2.5% was seen as a hawkish stance, but its impact was overshadowed by accelerating inflation in the US.
US producer price data showed a 0.4% month-over-month increase, with an annual rate of 5.4%, reversing recent progress on inflation and fueling demand for the dollar.
The probability of a Fed rate rise in September has risen to 70%, up from 60%, and expectations for further tightening have increased as a result of the PPI figures.