The Euro fell against the Dollar after the ECB held rates steady but hinted at a potential September hike amid inflation concerns.
EUR/USD declined 0.3% to 1.1377 as the Euro weakened against the US Dollar, despite the European Central Bank signaling a possible rate hike in September. The ECB left rates unchanged in July but acknowledged internal discussions about tightening policy sooner.
Markets interpreted ECB President Lagarde’s remarks as a bias toward further tightening, with September seen as a likely window for action. New economic data, including inflation prints and business surveys, will inform the decision, alongside updated staff forecasts.
The Euro’s decline occurred even as policymakers suggested a hawkish shift, reflecting broader market sentiment and geopolitical risks, including renewed Middle East tensions.