ECB Rate Decision and Ongoing US-Iran Conflict Fuel Market Volatility

The European Central Bank (ECB) is set to make its rate decision today at 12:15 GMT, leaving its deposit rate unchanged at 2.25%. The central bank raised rates by 25 basis points in June and policymakers are assessing the implications of the renewed U.S.-Iran conflict.

The collapse of the ceasefire between the U.S. and Iran has pushed oil prices back above $95 a barrel, reviving concerns over inflation and increasing the likelihood of further policy tightening.

Investors will be looking for any hints from ECB President Christine Lagarde's press conference that another rate hike could come as early as September, but even a hawkish hold from the ECB may struggle to generate a sustained rally in the euro towards 1.1500.