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ECB viewed as set to hike in September, deposit rate at 2.25% now

Deutsche Bank expects the ECB deposit rate to rise to 2.50% in September, with an additional move possible if energy prices stay elevated or second-round effects appear.

Reported · Written up by our desk · Central Banks

Deutsche Bank strategists said the European Central Bank left its deposit rate unchanged at 2.25%, while its messaging continued to suggest further tightening could be on the table.

The bank’s view is that a September rate increase to 2.50% is highly likely, with the risk of an extra hike if energy prices remain persistently elevated or if evidence of second-round effects emerges.

The focus for markets then shifts to upcoming US economic data, with investors looking ahead to preliminary July PMI releases, while FX traders also weighed regional PMI and retail sales updates earlier in the day.

FXStreet also noted broader market moves, including GBP/USD holding above 1.3300 and EUR/USD trading below 1.1400 as the dollar firmed on risk-averse conditions.

Latest closeEUR/USD 1.138 ▼0.2%|GBP/USD 1.331 ▼0.5%

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