EUR/USD Slips as ECB Keeps Hawkish Stance Amid Energy Price Concerns

The European Central Bank (ECB) has maintained its hawkish stance on interest rates, with an ECB Governing Council member suggesting that a rate increase remains more likely than a hold. This sentiment is reflected in the EUR/USD price action, which slipped slightly to 1.1369.

UOB strategists now expect one final 25 bps ECB hike in September, taking the deposit rate to 2.50%, followed by an extended pause. However, additional tightening cannot be ruled out if elevated energy prices persist and lead to stronger second-round inflation effects.