European shares hit fresh three-year highs on Monday with oil firms gaining as crude prices stayed high and the euro fell to its lowest level against the dollar since May 2004, helping exporters. Trade was quiet with U.S. markets shut for Independence Day. "The market is refocusing on the strength of the U.S. economy, in addition recent comments from the Fed support further rate increases. A strengthening dollar is positive for European stocks," said Akber Khan, from the European Equity Focus team at Deutsche Bank, according to Reuters. The dollar rose renewed expectations of further Federal Reserve interest rate hikes while the European Central Bank is seen holding rates on Thursday despite growing calls for a cut. Eurozone producer prices fell a larger-than-expected 0.2 percent in May from April, the first monthly fall this year. U.S. crude oil futures were at $59.10 a barrel after hefty gains last week with some analysts predicting prices will surge again when U.S. markets reopen from the long weekend. BP added 3.3 percent before its trading statement on Tuesday and Shell rose 2 percent ahead of Royal Dutch/Shell's full unification. --More 1804 Local Time 1504 GMT
