ECB to reduce bond purchases in Q4 due to positive outlook brought by vaccination: EUR strengthened

ECB decided earlier to trim the emergency bond purchases in Q4 but did not officially admit that it was tapering. The decision marked the first step towards unwinding the stimulus aid during the pandemic. Some sources say that the amount will likely be reduced from 80 billion euros to 60-70 billion euros per month. The reason that led to this decision was mainly the high vaccination rate which helped bolster the eurozone economy. Inflation has been on the rise but is still below ECB’s mid-term target. After the announcement, EUR rose by 0.11% to 1.1828. Currently, it slid back a little bit, hovering around 1.1820.

The latest jobless claims data in the US showed that the number of people filing for jobless benefits fell to its 18-month low. This information provides evidence that slow growth in the labor market might be due to labor shortages rather than slow growth in consumer demand. DXY Index is currently trading at 92.55, regaining some losses brought by the disappointing nonfarm payrolls.