Rapid gains by the euro against the dollar are worrying a growing number of policymakers at the European Central Bank, raising the chance its asset purchases will be phased out only slowly, three sources familiar with discussions told Reuters.
The scheme is due to expire at the end of 2017 but formal talks over its future are only beginning, meaning the European Central Bank is highly unlikely to take any decision at next Thursday's rate meeting, the sources said.
Pressure is building for a gentle rather than a rapid reduction in the pace of asset buying from some policymakers, particularly in the bloc's weaker economies, who are concerned that the strong euro could dampen inflation and hamper growth by making exports dearer, the sources said.
"The exchange rate has become a bigger issue," one of the sources told Reuters. "It is now less favorable for an exit and a stronger argument for a muddle-through option."
The ECB has said it will announce in autumn if it will extend the asset buys, known as quantitative easing (QE) and launched two and a half years ago to bring down borrowing costs, revive growth and prop up inflation.
ECB head Mario Draghi has said that the programme will continue until the central bank is happy that inflation is consistent with its medium-term target of just below 2 percent.