The head of the European Central Bank says he's ready to act quickly to raise inflation in the euro-zone, hinting that the bank will unveil fresh stimulus measures at its Dec. 3 meeting.
Mario Draghi highlighted changes to the ECB's asset purchase program and deposit rate as possible tools to stop inflation from falling further below its target of just under 2%.
Draghi said there was more risk these days that the ECB would miss that target, and added that the strength of the euro-zone's recovery was modest and the global outlook for demand, particularly in emerging countries, had worsened significantly in recent months.
His views appeared likely to meet opposition on the ECB's Governing Council, which includes the bank's executive board members and the governors of the bloc's 19 central banks.
Following Draghi's comments the euro fell as low as $1.0664 against the U.S. dollar and traded near three-month lows against the pound sterling. It then recouped its losses to move back above $1.07 U.S.
The ECB has purchased 60 billion euros ($64 billion U.S.) a month of mostly government bonds since March to help revive inflation -- a process known as "quantitative easing" (QE) but prices rose just 0.1% in October.
Draghi defended QE, noting it had brought down borrowing costs for euro-zone companies.
He said the scheme could be expanded and extended and its composition changed to provide further stimulus while the deposit rate could be cut again to boost QE's effectiveness.
