The European Central Bank left its main interest rate unchanged at 2% as expected on Thursday, taking a break after a year of policy easing to wait for clarity over Europe's future trade relations with the United States.

There’s little reason for the European Central Bank to lower interest rates further unless the economy suffers a major blow, according to Governing Council member Martins Kazaks.

Policymakers must remain agile, noting that the stronger euro was having a significant disinflationary effect, Bank of France Governor Francois Villeroy de Galhau said.

The European Central Bank is leaving interest rates unchanged as it waits to see how big a blow U.S. President Donald Trump's tariffs will inflict on the economy before deciding whether to cut rates again.

European bonds dropped for a third day as traders continued to reduce their bets on a final European Central Bank interest-rate cut this year.

Markets are pricing in the ECB keeping its deposit rate at 2%, having reduced it by 25 basis points eight times over the last year as inflation cooled and the eurozone’s economic growth struggled for traction.