The European Central Bank (ECB) left its key interest rates unchanged at its April meeting, as widely expected, while President Christine Lagarde signalled the bank remains data-dependent regarding future moves. The euro gave back some earlier gains following the announcement.
ECB Statement Highlights
The deposit facility rate was held at 4.0%, the main refinancing rate at 4.5%, and the marginal lending rate at 4.75%. The ECB reiterated its commitment to bringing inflation back to the 2% target in a timely manner.
EUR/USD initially dipped to 1.0798 immediately after the decision before recovering to trade around 1.0820, down 0.18% on the day.
Lagarde Press Conference
In her press conference, President Lagarde noted that inflation was continuing to ease but remained too high. She emphasised that the Governing Council would continue to follow a data-dependent approach and would not pre-commit to any particular rate path.
“We are not yet sufficiently confident that inflation will return sustainably to our 2% target. We will know more by our June meeting when we have additional data.” โ ECB President Lagarde
Markets now price in approximately two rate cuts from the ECB before year-end, with the first expected in June if inflation data cooperates.