ECB's Draghi sees inflation headwinds from euro volatility

FRANKFURT (Reuters) - The European Central Bank is increasingly confident that it will lift inflation back to its target but also faces new obstacles from currency market volatility, ECB President Mario Draghi told the European Parliament on Monday.

"New headwinds have arisen from the recent volatility in the exchange rate, whose implications for the medium-term outlook for price stability require close monitoring," Draghi said in Strasbourg in a speech that is largely consistent with the bank's last policy message.

The ECB left its ultra easy policy unchanged last month, warning that inflation remains muted and may take several more years before it rose back to the bank's target of almost 2 percent.

Still, with the euro zone economy motoring ahead and unemployment falling rapidly, the ECB is expected to end its more than three-year, 2.55 trillion euro ($3.17 trillion) bond purchase programme later this year, taking a step back from unconventional stimulus.

($1 = 0.8055 euros)

(Reporting by Balazs Koranyi; Editing by Francesco Canepa)