Forex

Euro Dives as ECB Hikes Rates Again, Dollar Index Surges

Guavy AI Editorial Team Published September 11, 2026

Instruments

EUR USD

The euro fell against major currencies on Thursday after the European Central Bank raised interest rates by 25 basis points, marking its second rate hike this year. The move was widely expected to quell energy-driven inflation triggered by the Iran war.

Despite the hawkish tone, markets were more concerned about the economic impact of future hikes and worried about the central bank's ability to tame inflation. The euro dropped immediately after the decision, down 0.19% against the dollar at $1.1612.

Eugene Epstein, head of structured products for North America at Moneycorp, said that '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.'

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