The dollar index rose to 99 on Thursday, as another rally in oil prices amid escalating hostilities between the US and Iran prompted investors to increase bets on a Fed rate hike next week. Markets are now pricing a 70% chance of a 25bps increase, up from 60% yesterday, while a hike is fully priced in for October. The PPI report did little to alter expectations. While headline producer inflation accelerated to 0.4%, core PPI rose 0.2% mom, below both the previous month’s 0.3% increase and forecasts of 0.3%. The CPI report on Friday will be key in assessing the outlook for price pressures. Elsewhere, the ECB raised borrowing costs by 25bps as expected and lifted its inflation forecasts.