Euro rises ahead of ECB decision, with market focus on September rate hike signals and oil price impact

(1) Ahead of the European Central Bank's policy decision scheduled for later today, the euro rose 0.2% against the US dollar to 1.1427. The market widely expects that this meeting will keep interest rates unchanged, but money market data shows that the probability of a 25 basis point rate hike in September has reached 84%. (2) Investors will closely watch the ECB's stance on the recent rebound in oil prices caused by the escalation of US-Iran tensions to assess its impact on the inflation outlook. (3) Commerzbank analyst Antje Praefcke pointed out that the ECB may reinforce its forward guidance for a September rate hike, but since the market has already fully priced this in, the euro may gain only limited additional support from this.