Euro Holds Above 1.1700 as Markets Focus on ECB Rate Decision

Key Moments

EUR/USD Steadies Ahead of ECB Decision

EUR/USD is holding above the 1.1700 level as investors position for the European Central Bank (ECB) policy meeting. According to BBH FX analysts, the currency pair is weaker on the day but remains above yesterday’s low near 1.1703, with traders closely monitoring the outcome of the meeting and subsequent communication.

Some big #EURUSD expiries at 1.7000 today as reported by @forexflowlive today pic.twitter.com/QNo7tB1lam

— Forex Analytix (@forexanalytix) December 18, 2025

Policy Rate Expectations and ECB Outlook

Market participants broadly expect the ECB to keep its key policy rate unchanged at 2.00% for the fourth meeting in a row. Analysts note that the accompanying statement and the updated macroeconomic projections are likely to convey that the central bank is comfortable maintaining current settings for an extended period.

Lagarde’s Guidance Seen as Key for Euro Direction

BBH analysts emphasize that investors will scrutinize ECB President Christine Lagarde’s remarks for any signal on the future path of interest rates. They highlight that the reaction of EUR/USD could hinge on how she addresses current market expectations for additional tightening.

“Watch out to see if ECB President Christine Lagarde pushes back against market pricing for rate hikes or shows she is comfortable with them; if she’s comfortable, it will give EUR a boost.”