ECB Keeps Rates Steady, Warns of Further Hikes Amid Energy Price Fears

The European Central Bank (ECB) maintained its deposit rate at 2.25% on Thursday, but indicated that it may hike rates further in the coming months as energy prices continue to rise due to the widening conflict in the Middle East.

The ECB said it was 'closely monitoring' the intensity and duration of the shock, as well as its indirect and second-round effects. The euro extended its falls and was last down 0.28% at $1.1378.

Money markets price in a high chance of two more rate increases by year-end, with interest-rate sensitive two-year bond yields across the euro area holding higher on the day.