European Central Bank willing to act on rates, purchases to boost inflation: Draghi

Many analysts believe the statement from Draghi are being seen as a green light by market participants that the bank would take action at its December 3 meeting.

In a speech in Frankfurt, the ECB's president said the governing council needed to assess whether "if left to its own forces, the economy would be able to achieve a self-sustaining trajectory".

The ECB's $1 trillion bond buying program runs until at least September 2016, but inflation came in at just 0.1% in October - well below the bank's 2% target.

It also sounds like the European Central Bank may cut the already-negative deposit rate (-0.20%) further below zero, something that was thought extremely unlikely until recently.

The Dow Jones industrial average rose 138.33 points, or 0.78 percent, to 17,871.08, the S&P 500 gained 12.15 points, or 0.58 percent, to 2,093.39 and the Nasdaq Composite added 31.73 points, or 0.63 percent, to 5,105.37.

Draghi argued that the current stimulus has had a strong effect in supporting the economy, which has this year been growing gradually.

Draghi defended QE, noting it had brought down borrowing costs for euro-zone companies. Lower oil price reduces energy bills of both households and businesses, which frees up more money for consumption, investment and for debt reduction. The greenback fell last week against the basket of currencies used to measure its broader strength and is up just 0.3 percent this week.

Unemployment is only slowly edging down from a high 10.8 percent.

On Friday in Frankfurt, Draghi said that the growth outlook for emerging markets had fallen short of expectations and said that global economic growth would be the lowest in six years. The New Zealand dollar, another strong performer, was little changed at $0.6559 after gaining 1.4 percent on Thursday in a rally triggered by upbeat domestic producer prices data.

Peter Praet, one of the most influential voices at the central bank, spelled out his fear that consumers and investors could lose faith in the ECB's ability to keep prices on track if inflation slowed further.

But Bundesbank president Jens Weidmann warned against hastily boosting stimulus measures, saying "we should not forget that the monetary policy measures already taken still need time to fully feed into the economy".

The ECB is facing further pressure to act - alongside China - as the US Federal Reserve prepares to raise interest rates for the first time since the financial crisis. The ECB's move, likely to happen on December 3, is likely to weaken the euro and strengthen the dollar, while the Fed could give the dollar even bigger boost on December 16.