BERLIN — The president of the European Central Bank, Mario Draghi, pledged Thursday to keep a close eye on the rise of the euro, which could have the potential to weaken the region’s economy further.
His comments surprised markets and helped drive down Europe’s single currency from $1.355 to $1.34. The euro has been steadily appreciating since July 25, when it stood at $1.21 amid concern the currency would break up.
A rising exchange rate could hurt the eurozone economy, which is in recession. It could be bad for manufacturers and other businesses that depend on exports. As well as increasing the cost of exports, a rising euro has the effect of lowering the price of imports — which in turn would affect European prices. The ECB is mandated to maintain price stability.