• The European Central Bank is set to leave key rates unchanged after July policy meeting.
• ECB President Christine Lagarde will be questioned about the possibility of a rate cut in September.
• EUR/USD closes in on fresh 2024 highs ahead of the ECB’s policy announcements. 

The European Central Bank (ECB) will announce its monetary policy decisions following the July meeting on Thursday at 12:15 GMT. ECB President Christine Lagarde will deliver a prepared statement on monetary policy and respond to questions at a press conference starting at 12:45 GMT.

What to expect from the European Central Bank interest rate decision?

The ECB lowered key rates by 25 basis points (bp) following the June policy meeting, as expected. With this decision, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility came down to 4.25%, 4.5%, and 3.75%, respectively. Rates are widely forecast to remain unchanged following the July policy meeting.

In June’s policy statement, the ECB reiterated that it will continue to follow a data-dependent and meeting-by-meeting approach in determining the appropriate level and duration of monetary restriction. The accounts of the meeting showed that some policymakers felt that the data available since the last meeting had not increased their confidence that inflation would converge to the 2% central bank’s target.