European session review: EUR strengthens after the announcement of ECB’s monetary policy decisions

EUR rose against most other major currencies in the European session on Thursday after the release of the latest monetary policy statement by the European Central Bank (ECB), which, in general, offered nothing new for market participants. 

At its latest monetary policy meeting, the ECB’s policymakers made no changes to its policy stance. The Bank’s key interest rates were left unchanged, as widely expected. The Bank also repeated its pledge to continue its purchases under the pandemic emergency purchase programme (PEPP) with a total envelope of EUR1,350 billion. The purchases under the PEPP were confirmed to be conducted until at least the end of June 2021 and, in any case, until the ECB’s governing council judges that the coronavirus crisis phase is over. The Bank also repeated its promise to continue to provide ample liquidity through its refinancing operations as well as to continue purchases under the asset purchase programme (APP) at a monthly pace of EUR20 billion, together with the purchases under the additional EUR120 billion temporary envelope until the end of the year.

The announced outcomes of the ECB’s September meeting were in line with markets' expectations. Market participants’ attention is now turning towards the press conference by the ECB’s President Christine Lagar (due at 12:30 GMT), during which she is to take questions from the media as well. Investors are looking forward to the ECB’s latest economic forecasts, thoughts on inflation and the strength of the euro. 

May we remind that the euro rebounded yesterday after media reported that some policymakers of ECB “have become more confident in their economic forecasts”.