Euro Falls as Dollar Rises After ECB Rate Hike

The dollar rose against major currencies on Thursday after the European Central Bank (ECB) delivered an expected interest rate hike. The ECB raised rates by 25 basis points, marking its second move this year to combat energy-driven inflation.

The euro dropped immediately after the decision and was last down 0.03 percent against the dollar at USD1.163. Eugene Epstein, head of structured products North America at Moneycorp, noted that US producer prices data came in line with market expectations, boosting chances of a Federal Reserve rate hike next week.

The main driver of the dollar's gains seemed to be the PPI data, which markets are 'quite jittery' ahead of tomorrow's CPI. Brent crude futures rose 5 percent to USD106.56 a barrel, but this had little impact on the euro due to Europe's weakened reliance on oil-price movements.