The shared currency erased losses versus the dollar just hours after European Central Bank President Mario Draghi said the central bank may reconsider its policy stance in March amid a deteriorating economic outlook and turmoil in global markets. The euro remained lower versus the currencies of commodity exporters, including Canada, South Africa and Australia, as risk assets rallied.

Policy makers are struggling to lift inflation, a goal of the ECB, as tumbling commodities continue to weigh on consumer prices. Growing concern about a slowdown in China has roiled markets around the world, further complicating the task. While Draghi reiterated that the euro is “not a policy target,” he said the ECB was conscious of the effective exchange rate. Easing typically weakens a currency, which can help stimulate growth and inflation.

The euro fell as much as 1.2 percent, the most since Jan. 8, before trading little changed at $1.0882 as of 2:36 p.m. in New York. The currency lost more than 1 percent versus the Canadian dollar, South African rand and Australian dollar. The euro is up 0.2 percent versus the dollar this year after weakening more than 10 percent during each of the past two years.

Source : Bloomberg