Given a string of similar comments by ECB leader in recent weeks analysts now expect the central bank will increase the amount of stimulus at its meeting next month.
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Draghi added that the interest rate on the deposit facility “can empower the transmission” of asset purchases, “not least by increasing the velocity of circulation of bank reserves”.
The euro fell as much as 0.5 percent to 69.85 pence, just above a three-month low of 69.82 pence hit on Wednesday.
Draghi’s remarks were countered by cautionary statements at the forum from stimulus skeptic Jens Weidmann, who sits on the ECB’s policy-setting council by virtue of his job as head of Germany’s national central bank, the Bundesbank.
The Standard & Poor’s 500 index climbed 0.4 percent at 4 p.m.in NY, capping a 3.3 percent gain in the week that was the best since December. A decision will be made at the ECB’s December 3 meeting.
Draghi on Friday suggested that the European Central Bank would do whatever it takes to raise inflation as fast as possible, and pointed to the benefits of a cut in deposit rates to aid an expansion of its quantitative easing programme of bond-buying.
In a speech at the Frankfurt European Banking Congress, Draghi warned that inflation was stubbornly way below the target of close to 2 percent even though the bank has deployed a 1.1 trillion euros (1.2 trillion) scheme to help lift consumer prices.
Europe’s recovery is important for the troubled global economy, which has seen growth slow in emerging markets such as China even as Europe and the United States recover from the financial crisis of 2007-2009 and the eurozone’s troubles over government debt. “Chinese authorities are desperate to support share prices while the European Central Bank has also clearly indicated an easing in December”, said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
Mario Draghi’s soothing sounds underpinned the broader euro zone bond market, however, as core German Bunds, but also French, Italian and Spain bonds, cruised towards their second straight week of yield falls.
Shares in pharma giant Pfizer are also inching up by about 1% premarket after the U.S. Treasury announced new measures that could deter the company from pursuing a massive takeover deal with Irish-based Allergan. Crude futures settled at $40.39 a barrel, down 0.4 percent on the day after briefly erasing losses as the number of active US oil rigs dropped to a five-year low. 891 late Thursday in NY.
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Metals were higher as gold rose 0.51% to $1,083 a troy ounce, while silver gained 0.36% to $14.31 an ounce, and copper edged up 0.79% to $2.10 a pound.
