EUR traded mixed against other major currencies in the European session on Friday, as market participants seemed to be unimpressed with the ECB’s announcement that emergency asset purchases could be reduced by a moderate pace.

The single European currency rose against JPY and CHF,  declined against CAD, AUD, NZD and GBP, and changed little against USD.

At yesterday’s meeting, the ECB’s policymakers decided to leave the bank’s key interest rates unchanged but judged that favourable financing conditions could be maintained with a moderately lower pace of the pandemic emergency purchase programme (PEPP) purchases. The move was widely expected and largely priced in by the markets. 

Commenting on the central bank’s decision to slow the pace of asset buying under PEPP, its president Christine Lagarde stated that the change was a moderate “recalibrating” of the program, not tapering. She also did not explain what a “moderately lower pace” would actually mean in practice. Lagarde, however, provided upwardly revised projections for the euro zone’s GDP growth and inflation for this year - to 5% and 2.2% respectively (up from 4.6% and 1.9% seen in June). Forecasts for 2022 and 2023 also saw slight revisions.