Rabobank projects the ECB will pause rate hikes in October before implementing a final increase in December, citing ongoing upside risks to inflation despite a lack of broad second-round effects.
The EURUSD pair is influenced by Rabobank's outlook for the European Central Bank's monetary policy trajectory. By anticipating a hold in October followed by a final rate hike in December, the bank suggests a hawkish bias that could provide support for the euro against the dollar as the ECB continues to combat persistent upside inflation risks.
Rabobank expects the ECB to keep the deposit rate unchanged at 2.50%.
The expectation is driven by the persistence of upside inflation risks within the Eurozone.
Rabobank strategist Bas van Geffen anticipates the European Central Bank will maintain its deposit rate at 2.50% during the October policy meeting. While inflation risks remain elevated, the firm expects a final interest rate increase in December to address persistent price pressures.
Rabobank expects the ECB to keep rates unchanged at 2.50% in October, followed by a final hike in December.