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22 Nov 2016 02:04GMT
EUR/USD - Reuters overnight news on ECB, two of its top officials said it needs to continue supporting the euro zone economy with its ultra-loose policy, and cementing expectations for an extension of the ECB's bond-buying scheme next month.
The ECB will decide on Dec. 8 on whether and how to extend its 80 billion euros ($85 billion) monthly bond purchases. Sources have told Reuters the programme is all but certain to continue beyond its current March deadline.
President Mario Draghi told a European Parliament committee on Monday that ECB needed to maintain its current level of monetary support to bring euro zone inflation back to its target of almost 2 percent.
Euro zone inflation was 0.5 percent last month and is expected to rise beyond 1 percent early next year, mainly due to a stabilisation in oil prices.
Speaking in Munich, ECB Executive Board member Benoit Coeure said the time to start winding down the ECB's extraordinary policy accommodation had "not yet" come and the Bank needed to see a sustained rebound in inflation first.
Market-based gauges of inflation expectations have surged over the past two months and particularly since Donald Trump's U.S. election victory, which has spurred investor bets on greater fiscal spending in the United States.
But Draghi cautioned on Monday one should look beyond the market reaction to Trump's win, which will have long-term consequences that are difficult to predict.
Now sitting on more than a trillion-euros worth of government bonds, the ECB is looking for ways to ensure it can continue to find assets to buy in the coming months if its programme is extended.
Coeure said the ECB was far from having to contemplate buying stocks and had never discussed such option, which has been adopted by the Bank of Japan.
ECB sources have told Reuters one possible change being considered would see the ECB buying fewer bonds from countries where scarcity is starting to emerge, such as Germany.
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