EUR/USD Tumbles on ECB Hints at Final Rate Hike in September

The EUR/USD slipped by 0.1% to 1.1369 after European Central Bank (ECB) Governing Council member Gediminas Simkus hinted at a possible interest rate increase.

According to UOB strategists, this suggests that a 25-bps hike in September is more likely than not, taking the deposit rate to 2.50% and marking a final increase before an extended pause.

However, if energy prices remain elevated and lead to stronger second-round inflation effects, additional tightening cannot be ruled out.