The European Central Bank (ECB) decided to leave the interest rates on the main refinancing operations, the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.50%, respectively, as expected.
Follow our live coverage of the ECB's policy announcements and the market reaction.
The ECB further noted that it will continue to conduct net asset purchases under Pandemic Emergency Purchase Programme (PEPP) with a total envelope of €1,850 billion until at least end of March 2022.
Market reaction
The EUR/USD pair showed no immediate reaction to the ECB's announcements and was last seen gaining 0.18% on a daily basis at 1.2055.
Key takeaways from policy statement as summarized by Reuters
"Since incoming information confirmed the joint assessment of financing conditions and inflation outlook carried out at march monetary policy meeting, ECB expects purchases under PEPP over current quarter to continue to be conducted at a significantly higher pace than during first months of the year."
"Will purchase flexibly according to market conditions and with a view to preventing a tightening of financing conditions that is inconsistent with countering the downward impact of the pandemic on the projected path of inflation."
"In addition, the flexibility of purchases over time, across asset classes and among jurisdictions will continue to support the smooth transmission of monetary policy."
"If favourable financing conditions can be maintained with asset purchase flows that do not exhaust envelope over net purchase horizon of PEPP, envelope need not be used in full."
"Envelope can be recalibrated if required to maintain favourable financing conditions to help counter negative pandemic shock to the path of inflation."
"ECB will continue to reinvest principal payments from maturing securities purchased under PEPP until at least the end of 2023."
"In any case, future roll-off of PEPP portfolio will be managed to avoid interference with the appropriate monetary policy stance."
Net purchases will continue at a monthly pace of €20 billion."
"ECB will continue to provide ample liquidity through its refinancing operations."
"ECB stands ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays pressured toward 1.0500, US PPI data next in focus
EUR/USD remains heavy toward 1.0500 in the European session on Thursday, hanging at yearly lows. The Trump trades-driven unabated US Dollar demand and tarrifs threat weigh on the pair. Mixed Eurozone data fail to lift the Euro. Eyes turn to US PPI data and Fed Chair Powell.
GBP/USD holds losses near 1.2650 on relentless US Dollar buying
GBP/USD is holding losses while flirting with multi-month lows near 1.2650 in European trading on Thursday. The pair remains vulnerable amid a broadly firmer US Dollar and softer risk tone even as BoE policymakers stick to a cautious stance on policy. Speeches from Powell and Bailey are eyed.
Gold price approaches 100-day SMA/50% Fibo. confluence amid sustained USD buying
Gold price touches its lowest level since September 19, around $2,550 area during the early part of the European session on Thursday. The US Dollar buying remains unabated in the wake of optimism over the expected expansionary policies by US President-elect Donald Trump.
XRP struggles near $0.7440, could still sustain rally after Robinhood listing
Ripple's XRP is trading near $0.6900, down nearly 3% on Wednesday, as declining open interest could extend its price correction. However, other on-chain metrics point to a long-term bullish setup.
Trump vs CPI
US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.