Euro Steady Above $1.26 After Draghi Promises Recovery

The euro was steady at $1.2655 at 7:00 GMT on Monday after a week of disappointing data from the bloc’s largest economy.

Germany, normally the eurozone’s growth engine, posted disappointing manufacturing, industrial output and export data in the week ending on October 10.

Despite the poor data from Germany, European Central Bank President Mario Draghi remained positive, saying that the bloc’s economy is still expected to recover modestly in the longer term.

On Friday, The Wall Street Journal reported that Draghi said that the bank’s survey data shows that the eurozone’s growth is likely to remain stifled for the remainder of the year, but that recovery will likely restart in the future. He reassured markets that despite recently falling inflation figures, consumer prices are expected to rise through 2015 and 2016.

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Draghi also cautioned that geopolitical factors as well as the consequences of changing monetary policies around the world have the potential to disrupt the bank’s forecasts.

Ongoing trouble in Ukraine and tension between the West and Russia has weighed on the region as Russia has been one of the eurozone’s biggest trade partners.

Draghi also reiterated that the ECB is committed to the region’s recovery and that it would be willing to do whatever is necessary to keep the region afloat.

However, the bank may not be unanimously committed as Bundesbank Jens Weidmann has been very vocal about his disapproval of any further easing from the ECB. Weidmann has said that he is unwilling to inject any more liquidity into the financial system without seeing some further structural reforms in struggling eurozone economies.