Markets await Lagarde’s press conference for September rate hike signals as the ECB holds rates at 2.25%.
The European Central Bank is set to keep its deposit facility rate at 2.25% during Thursday’s meeting, with markets pricing near-certainty for no change. The main refinancing and marginal lending rates are also expected to remain at 2.40% and 2.65%, respectively.
Inflation has eased but remains above the ECB’s 2% target, while euro area growth stays sluggish. Policymakers are balancing upside inflation risks from rising oil prices against the impact of prior rate hikes, delaying further action until more data emerges.
Traders will focus on President Christine Lagarde’s press conference for hints on a potential September hike. A hawkish tone on inflation could support the euro, while emphasis on growth risks may weigh on EURUSD.