This really has more to do with the individual hotel(s) in question than Starwood. You do have a right to request the charge to be made in the local currency, however, as you acknowledged yourself:
Originally Posted by venk
I didn't read the credit card slip carefully at the time [..] There was also a US$ dollar amount in the slip but I didn't pay much attention.
In your case it wasn't "fraud" because:
Originally Posted by venk
The credit card slip had the lettering in it that said cardholder in it will be charged in US dollars.
The multi-currency billing is becoming a popular option for merchants in Europe. However, the merchant should provide the customer with
an option of billing in their "home" currency (e.g. USD for US-issued cards).
For example, customers at Harrods in London are always asked about their preferred option before a transaction is completed.
I have experienced a similar issue in one of the non-Starwood London hotels. The "bill-in-home-currency" option was the default setting on their terminal. I immediately noticed the CAD amount on the sales slip and requested to be billed in GBP, but none of the clerks knew how to change it! Instead, they came up with a story that the CAD amount "was for information purposes only". Now
that would be fraud...