EUR/USD is slightly below 1.09. The ECB kept interest rates on hold, as expected, and left its September rate decision “very open” and data-dependent, said Chang Wei Liang, currency and credit strategist at DBS.

ECB leans towards caution

“EUR/USD fell slightly below 1.09, with the ECB keeping interest rates on hold, in line with expectations, leaving a decision on September rates “completely open” and data-dependent. ECB President Lagarde suggested another cut was possible if data “confirmed a disinflation process” and market expectations were unchanged from an expected September cut.”

“Meanwhile, political conflicts in France and possible disagreements over the budget could weigh on consumption and investment, providing further reasons for the ECB to remain cautious.”