AFP, FRANKFURT AM MAIN: European Central Bank president Mario Draghi scolded US Treasury Secretary Steven Mnuchin Thursday for comments that sent the euro soaring against the dollar, but was unable to halt the single currency’s upward surge.

A more valuable euro was partly a sign of the gathering strength of the eurozone, Draghi said, and partly because “someone else’s communication does not comply with the agreed terms of reference”.

Without directly referring to Mnuchin’s comment on Wednesday that “a weaker dollar is good” for the United States, Draghi rebuked the “use of language” that could upset currency markets.

Quoting from an International Monetary Fund statement in October, Draghi said nations had agreed they will “refrain from competitive devaluations, and will not target our exchange rates for competitive purposes”.

But while the central bank chief’s message was clear, his statement that the vaulting euro was “a source of uncertainty which requires monitoring” after a regular gathering of the ECB’s policy-setting governing council failed to brake its rise.

The 19-nation currency blasted to levels above $1.25 as Draghi spoke, its highest since December 2014, weighing on European stock markets, with Germany’s blue-chip DAX index down by around 1.2 per cent after spending much of the day flat.

“Draghi expressed disquiet over the recent volatility of the single currency and its impact on uncertainty but there was no mention of its level,” NFS Macro analyst Nick Stamenkovic noted.

The calm with which the ECB chief faced the euro’s rise may have encouraged financial markets to boost it further, he added.

The market reaction underscored how tricky it will be for the ECB to wean the eurozone off mass

bond-buying and ultimately raise interest rates in the coming months and years.

The single currency had already been boosted by the minutes of the ECB’s December’s meeting, which showed that governors plan to “revisit” their massive support for the eurozone early this year, as well as by a slew of positive survey data pointing to strong growth ahead.

On Thursday, policymakers left their 30-billion-euro-per-month ($37.5-billion) “quantitative easing”—or bond-buying—scheme and historic low interest rates untouched.

The ECB’s crisis-fighting tools includde almost 2.3 trillion euros in purchases of government and corporate bonds, cheap loans to banks and low rates. And they are aimed at firing eurozone growth and boosting inflation towards its target of just below 2.0 per cent.

Growth has indeed picked up—to an estimated 2.4 per cent in 2017 -- but inflation stood at just 1.4 per cent in December, complicating the path back from the bank’s interventions.

In what the ECB insists is a side effect, its policy has also suppressed the value of the euro against other currencies, supporting growth by encouraging exports and inflation by making imports more expensive.