Market Overview

ECB slows asset purchases

In its latest statement today, ECB said that it will continue “with a moderately lower pace of net asset purchases” under PEPP, after two quarters of acceleration. At the same time, its volume (€1.85 trillion), as well as key interest rates, remained unchanged.

Key European stock indices are strengthening after the press release as the ECB promised a flexible approach to the volume of monthly purchases based on market conditions. For the markets, this means a stabilisation mechanism in case of deteriorating financial conditions.

The single currency, however, also strengthened gains, rewriting intraday highs at $1.1840. In the EURUSD, the tug of war continues at levels just above the 50-day moving average near 1.1800. The same is true for the DXY dollar index as well as GBPUSD, where bull and bear forces are balanced near key levels. A strong move from current levels could form the basis for a trend right up to the end of the year.

The FxPro Analyst Team

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