ECB Rate Hike Confirmed: Lagarde's Guidance to Drive EUR/USD

The European Central Bank (ECB) is set to announce its interest rate decision on Thursday at 12:15 GMT, with most economists expecting a 25 basis point hike to 2.5%.

This move comes as Eurozone inflation accelerated to 3.3% YoY in August, up from 2.9% in July, while core inflation fell to 2.4% from 2.5%. Energy inflation jumped significantly, rising from 10.3% in July to 14.3%.

Rising oil prices, with Brent at almost $100 a barrel, and European natural gas at its highest level in three years due to escalating hostilities in the Middle East, have contributed to this upward trend.

Financial analysts believe that the hike is already priced in, making guidance from Lagarde on future rate increases crucial. The market is predicting nearly two more rate hikes over the next 12 months, with one potentially as early as December and another in Q2 or Q3 of next year.