The European Central Bank left interest rates unchanged on Thursday and offered a modestly upbeat assessment of the euro zone economy, raising doubts among investors about further policy easing even while U.

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

"At 2%, rates remain squarely to the middle of the ECB’s 1.5% to 2.5% neutral range. Uncertainty is highly elevated, however, and, if trade tensions escalate, further easing may well be required later in the year to help support business and consumer confidence." SYLVAIN BROYER, CHIEF EMEA ECONOMIST, S&P GLOBAL RATINGS:

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.

The European Central Bank is leaving interest rates unchanged as it waits to see the impact of U.S. President Donald Trump’s tariffs 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.