ECB keeps interest rates unchanged, as expected

The ECB maintained its benchmark deposit rate at 3.75%, after cutting it from an all-time high of 4% in June. The interest rate on its main refinancing operations also stayed at 4.25%, while the rate of its marginal lending facility remained at 4.50%.

The lack of movement this month had been largely telegraphed, with numerous officials arguing that price pressures are coming down as expected but risks remain, so more data is needed before another cut becomes a reality.

Markets are pricing in almost two rate cuts over the rest of the year, with the September meeting the current favorite to see the next move.

The ECB's key concern is that domestic prices, particularly for services, are moving sideways and relatively quick wage growth threatens to perpetuate inflation above its 2% medium-term target.

That said, the economy remains relatively weak, with a string of surveys pointing to anaemic growth, easing fears of future price pressures.

The focus will now turn to ECB President Christine Lagarde's accompanying press conference for more clues surrounding the central bank's future intentions.