BREAKING: The ECB slows down pace of PEPP

The European Central Bank has just announced its decision. Interest rates were obviously left unchanged - there is no surprise here at all. However, the pace of the PEPP (Pandemic Emergency Purchase Programme) was reduced from €80 billion per month. The ECB says that the PEPP purchases will be conducted at "moderately lower pace" - slowing down the QE was expected by some market participants. The ECB will continue to conduct PEPP purchases in a total envelope of €1,850 billion until at least March 2022.

The decision about PEPP may be seen as a slightly hawkish tilt. Still, the ECB remains extremely dovish in terms of its policy as a whole. As far as price growth, the Bank says that inflation may moderately exceed goal for transitory period. Te ECB is ready to adjust all tools to stabilise inflation at 2%. Now markets await the press conference with President Lagarde that starts at 1:30 pm BST. 

The euro hovered after the announcement, but there seem to be no clear direction for the EURUSD pair, at least for now. The main currency pair is hovering near 1.1835. European equity markets moved slightly higher after the decision.

EURUSD, H1 interval Source: xStation5