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Draghi's Pledge to Save Euro Sends Markets, Euro Higher

European Central Bank President Mario Draghi pledged on Thursday to do whatever was necessary to protect the euro zone from collapse, sending markets and the euro higher Thursday afternoon.

European Central Bank President Mario Draghi testifies before the European Parliament's economic affairs committee in his role as the head of the European Systemic Risk Board on May 31, 2012 in Brussels.
Thierry Charlier | AFP | Getty Images
European Central Bank President Mario Draghi testifies before the European Parliament's economic affairs committee in his role as the head of the European Systemic Risk Board on May 31, 2012 in Brussels.

"Within our mandate, the ECBis ready to do whatever it takes to preserve the euro. And believe me, it will be enough," he told an investment conference in London.

He said the central bank could fight unreasonably high government borrowing costs. This week has seen Spanish bond yields hit dangerously high levels.

"To the extent that the size of the sovereign premia (borrowing costs) hamper the functioning of the monetary policy transmission channels, they come within our mandate." The euro rose and safe-haven German bond futures turned negative after the comments.

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European markets, which had been flat for the day, turned positive, and U.S. stock futures, which had signalled a negative start to trading Thursday, turned sharply higher before the Wall Street open.

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