FXStreet notes that the European Central Bank (ECB) decided to keep interest rates and its QE programs unchanged on Thursday, as expected. Analysts at BBVA Research see the central bank continues to be very cautious but does not seem to be ready to extend the PEPP for the moment unless further risks on the pandemic and on the economy materialize.

“The Governing Council showed some concern over the implications of euro appreciation for inflation, but with the usual language that they do not target the euro.”

“Did not provide any surprises on the reaction by the ECB to the hottest topics post-summer - the most recent inflation figures and especially the appreciation of the euro. The ECB continues to be very cautious and dovish but does not seem to be ready to extend the PEPP for the moment, unless further risks on the pandemic and hence on the economy materialize.”