LONDON, Sept 9 (Reuters) - The euro extended modest gains versus the dollar on Thursday after the European Central Bank as expected said it would slightly reduce the pace of bond buying under its emergency scheme. The euro rose 0.3% to the day"s high of $1.1840immediately after the announcement but then fell back to trade at $1.1837, well below Friday"s two-month high of $1.1909. The ECB will in the next three months buy bonds under its 1.85 trillion euro Pandemic Emergency Purchase Programme (PEPP) at a pace moderately lower than the 80 billion euros a month it bought over the previous two quarters. That is a token step towards unwinding the emergency economic aid it has put in place during the pandemic.Analysts polled by Reuters had said they saw bond buying under the ECB"s pandemic emergency purchase programme (PEPP) falling to possibly as low as 60 billion euros ($71 billion) a month, before a further fall early next year and the scheme"s end in March. read more But the ECB did not signal any further withdrawal of support, and maintained its long-standing guidance that it will ramp up support further if it becomes necessary. Stocks fell on concerns about the global economy, helping currencies considered safer. That cautious mood helped the safe-haven Swiss franc. The dollar dropped 0.5% to 0.9174 francs , while the euro extended its drop after the ECB announcement and was last down 0.3% to 1.0859 francs . On Wednesday the franc had hit a two-month low against the euro. The yen was also stronger, with the dollar losing 0.2% to 130.06 yen . The dollar index dropped 0.2% to 92.477 . Sterling bucked the trend of weakness versus the dollar with a 0.5% gain to $1.3835 after falls earlier in the week . The Canadian dollar gained 0.1% to C$1.2677 per U.S. dollar , having fallen on Wednesday to its lowest since Aug. 23. The Bank of Canada left its key interest rate at a record low 0.25% and maintained its current quantitative easing program on Wednesday. The Chinese yuan gained 0.1% to 6.4525 per dollar in offshore trade, though price data showed a worsening environment for Chinese businesses. China"s factory gate inflation hit a 13-year high in August despite Beijing"s attempts to cool them while consumer inflation slowed unexpectedly in a sign of soft consumption. read more "USD/CNY is surprisingly nonchalant amid rising concerns over China"s property debt cycle and disappointing growth data," said BofA strategist Claudio Piron. However, Piron reckons that more monetary policy stimulus will push the onshore exchange rate to 6.55 yuan per dollar by the end of September and 6.6 by year-end as China"s yields become less attractive relative to U.S. Treasury yields. Emerging market mostly currencies fell as investors exited riskier assets. ($1 = 0.8459 euros)