FX.co ★ ECB Halts Rate Cuts Amid Trade Uncertainty

During its July meeting, the European Central Bank decided to maintain interest rates at their current levels, signaling the conclusion of its recent easing cycle following eight successive reductions. These cuts had previously lowered borrowing costs to their lowest since November 2022. The main refinancing rate remains steady at 2.15%, with the deposit facility rate at 2.0%. Policymakers have adopted a cautious approach, opting to monitor the ongoing impact of trade uncertainties and the possible implications of proposed U.S. tariffs on economic growth and inflation. Notably, inflation reached the ECB's 2% target in June, further justifying the decision to pause policy adjustments.