ECB Holds Rates at 4.5% Amid Sticky Inflation; Euro Slips to $1.08

The ECB held its key rate steady at 4.5% on May 1 amid persistent core inflation at 3.8% and rising energy costs, causing the euro to slip to around $1.08 with markets pricing a 60% chance of a June hike. This followed the April 30 decision—the sixth consecutive hold on main refinancing at 4.50%, deposit at 4.00%, and marginal lending at 4.75%—which was widely expected but flagged Middle East war risks pushing energy prices up 12%. Initial strength above 1.1700 faded as USD safe-haven demand grew, pointing to range-bound Euro vs US Dollar trading with heightened volatility risks ahead of data and geopolitics.