FX.co ★ ECB may not raise interest rates

European Central Bank President Christine Lagarde made it clear to the European market that the regulator may not consider a prospective interest rate hike at all in the near future. Notably, the bank is now actively cutting asset purchases as part of its asset purchase programme (APP), which is due to be completed at the start of the third quarter.Regarding inflation, she noted that the bank's forecasts were based on inflation being on target (2%) in the medium term (within one year).The European stock market rallied on her words, while EUR/USD rose slightly.Today, the market will focus on the publication of important US inflation data. If they do not decline more than expected, EUR/USD could clearly receive strong support amid a possible Fed decision to pause in raising borrowing costs after the June meeting.