French stocks rallied on Thursday, anticipating the European Central Bank's (ECB) policy meeting later in the day.
The ECB is expected to lower its benchmark interest rate from 4.25 percent to 4 percent in response to declining inflation and sluggish economic growth, setting the stage for a similar move by the Federal Reserve next week.
Investors will closely follow ECB President Christine Lagarde's remarks for indications of additional rate cuts in October and December.
The CAC 40 index rose 42 points, or 0.6 percent, to 7,439 after a 0.1 percent decline in the previous session.
Meanwhile, the U.S. dollar gained strength following the release of August's Consumer Price Index (CPI). While the CPI met expectations, core CPI inflation rose unexpectedly by 0.3 percent month-on-month, tempering hopes for a 50-basis-point rate cut at next week's Federal Open Market Committee (FOMC) meeting.
