ECB leaves key rates unchanged in July monetary policy decision, as expected

• Prior decision
• Main refinancing rate 4.25% vs 4.25% expected
• Prior 4.25%
• Deposit facility rate 3.75% vs 3.75% expected
• Prior 3.75%
• Marginal lending facility 4.50%
• Prior 4.50%
• Incoming information broadly supports previous assessment of inflation outlook
• Not pre-committing to a particular rate path
• Determined to ensure inflation returns to 2% target in a timely manner
• Will keep policy rates sufficiently restrictive for as long as necessary to return inflation back to medium-term target goal
• Domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above the target well into next year
• Full statement

The statement language is very much as expected as the ECB defers the decision to cut rates to September. There are no surprises in the wording and Lagarde should follow up on that similarly later. It’s as much as an “as you were” statement that the central bank could produce.

EUR/USD is little changed at 1.0930 levels currently still.

This article was written by Justin Low at www.forexlive.com.