ECB Holds Rates as Oil Weakness and Strong Dollar Ease Inflation Pressure

Maintaining its cautious stance, the European Central Bank left benchmark rates unchanged at 2 percent, citing improved inflation expectations. Softer energy prices and a stronger dollar have helped temper imported cost pressures across the bloc. President Lagarde noted that credit growth remains subdued, giving policymakers room to observe incoming data. Economists pointed to the third consecutive monthly drop in crude as a supporting factor for this pause. Market reaction stayed muted, though euro-area equities gained modestly on hopes that stability in policy will extend into early 2026.