ECB Hikes Rates, But No Commitment from Lagarde

The European Central Bank (ECB) raised its deposit rate to 2.50% on Thursday, as expected by all 65 economists in a Reuters poll.

The hike contained almost no surprise, but what came next was more important for currency traders: President Christine Lagarde's refusal to validate the path of additional tightening already embedded in European rates.

Lagarde repeated that policy would be determined on a data-dependent and meeting-by-meeting basis, saying the Governing Council was 'not pre-committing to a particular rate path.'

The ECB also lifted the main refinancing rate to 2.65% and the marginal lending facility to 2.90%, but these new rates will take effect on September 16, not immediately.