2018.01.1118:33:00UTC+00Euro Rallies after ECB Considers Shift in Policy Message

The euro strengthened against the dollar after the European Central Bank said it could reassess its communication stance early this year, bolstering expectations that policymakers are getting ready to trim their massive monetary stimulus program.

The Governing Council said there was a “widely shared view” among central bank officials that the policy guidance would need to evolve gradually based on the outlook for growth and inflation.

As the euro zone continues to show solid growth, the ECB is expected to gradually shift its view in order to avoid a more disruptive action later and look at the broaden adjustment of its policy guidance in order to divert focus from bond purchases and increase the attention on interest rates, the recording of the ECB's December meeting showed.

While inflation continues to be below ECB's expectations, the wider economy is booming, with the central bank projecting the fastest expansion in a decade in 2017. Surveys of optimism in the region have surged and indicators of activity have reached multi-year highs. The Governing Council noted the region's economic strength, stating that the recent figures showed a “solid, broad-based and increasingly self-sustaining economic expansion.”

The bullish tone of the minutes from ECB's mid-December policy meeting caused the single currency to advance 0.77 percent at $1.2037, poised for its biggest single-day percentage increase versus the greenback in around two months.

German government debt yields also rallied after the report.