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ECB expected to keep deposit rate at 2.25% while September remains live

TD Securities expects the ECB to pause after June’s 25 basis point hike, with guidance likely to stay dependent on growth, inflation, and the duration of the Middle East conflict.

Reported · Written up by our desk · Central Banks

TD Securities strategists expect the European Central Bank to hold its deposit rate at 2.25% in July, following its June increase.

The note points to weaker euro area growth, inflation easing versus prior projections, and a continued data dependent approach as reasons this week’s ECB decision may have limited near term impact on EUR/USD.

While the firm sees an additional hike as possible, it frames September as the key meeting, noting limited concrete guidance from July and suggesting President Lagarde is likely to reiterate a measured approach in the press conference.

TD Securities also links the timing and pace of future policy reactions to how long and how intensely the resumed Middle East conflict and any associated energy shock persist.

Latest closeEUR/USD 1.145 ▼0.2%

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