"If our updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase our confidence that inflation is converging to our target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction," European Central Bank Vice President Luis de Guindos said on Thursday, per Reuters.

He noted that inflation has fallen further this year and that it's expected to continue to decline in the medium term, albeit at a slower pace.

Market reaction

EUR/USD showed no reaction to these comments and was last seen trading marginally higher on the day at 1.0680.