• The European Central Bank is expected to cut key rates by 25 bps at the September policy meeting.
• ECB President Christine Lagarde’s presser and updated economic forecasts will be closely scrutinized for fresh policy cues.
• The ECB policy announcements are set to inject volatility around the EUR/USD pair.

The European Central Bank (ECB) interest rate decision will be announced alongside the publication of the staff’s updated economic projections following the September monetary policy meeting due on Thursday at 12:15 GMT.

ECB President Christine Lagarde's press conference will follow, beginning at 12:45 GMT, where she will deliver the prepared statement on monetary policy and respond to media questions. The ECB announcements are likely to rock the Euro (EUR) against the US Dollar (USD).

What to expect from the European Central Bank interest rate decision?

After standing pat on interest rates in July, the ECB is widely expected to reduce key rates by 25 basis points (bps) at its September policy meeting. The interest rates on the main refinancing operations, the marginal lending facility, and the deposit facility will likely be lowered to 4.0%, 4.25%, and 3.50%, respectively.

In June’s post-policy meeting press conference, ECB President Christine Lagarde said that "we are determined not to have a predetermined rate path. September decision is wide open." "September projections, plus other data, will be taken into account,” Lagarde added.

The accounts of the July ECB meeting showed that September “was widely seen as a good time to re-evaluate” the level of monetary policy restriction.