The euro neared a 2-year low against the dollar on Thursday morning, as the President of the European Central Bank (ECB) spoke at a conference at the Bank of Lithuania.
The single currency first started tumbling following comments Mario Draghi made to the Lithuanian business daily Verslo Zinios, published Thursday. He said he expected the euro zone to grow modestly in the second half of the year, helped by the ECB's recent stimulus steps. He also pledged to do more to help the euro area should it become necessary.
The euro then remained under pressure as Draghi delivered a speech in Lithuania's capital of Vilnius. It fell to $1.2717, near a 24-month low.
In the interview with Verslo Zinios, Draghi also repeated that the ECB was willing to instigate further stimulus measures if necessary.
"We stand ready to use additional unconventional instruments within our mandate, and alter the size or composition of our unconventional interventions should it become necessary to further address risks of a too prolonged period of low inflation," he was quoted as saying.
Draghi forecast "modest" growth in the second half of this year, despite "weaker than expected" preliminary economic data over the the summer.
He added that heightened geopolitical tensions could dampen business and consumer confidence. But he said sanctions, imposed on, and by, Russia as a result of the Ukraine conflict, had so far had limited impact on the euro zone economy.
'Baltic success story'
Lithuania is preparing to become the 19th member of the euro area at the start of next year.
At the conference on Thursday, Draghi commended the structural reform efforts of Baltic countries, including Lithuania, which he said had faced "deep recession" not that long ago.
"Lithuania is one of the fastest growing countries in Europe. Last year its GDP grew by 3.3 percent,whereas the euro area's GDP shrank by 0.4 percent. Quite remarkably, Lithuania managed to reboot its economy without any external support," Draghi said.
Draghi said the "Baltic success story" was an important lesson that showed "adjustment is politically feasible."
"Despite major fiscal consolidation, there was hardly any public protest against the government measures...governments not only acted boldly, but also immediately. They used the momentum of the crisis to implement the necessary consolidation and thus managed to convince the public of the need for these measures," he added.
Draghi has repeatedly urged euro zone countries to adopt structural reforms alongside the ECB's aggressive stimulus measures to boost their economies—a message he reiterated in his interview with Verslo Zinios on Thursday.