European Central Bank head Mario Draghi insisted Thursday the embattled euro was "irreversible" while the ECB was ready to intervene on the markets to force down bloc borrowing costs if need be.
"The euro is irreversible," Draghi told a press conference, noting that speculative financial market bets against the euro surviving were pushing government borrowing costs up to unacceptable levels.
Accordingly, the ECB "may undertake outright open market operations of a size adequate to reach its objective," he said, adding that the details of the operations would be worked out "in the coming weeks."
Draghi was speaking after the ECB left its key benchmark interest unchanged at 0.75 percent but markets sold off sharply as his remarks came through on disappointment that he had unveiled no specific new measures.
Last week, Draghi had promised that he would do everything in the ECB's powers to save the euro, raising hopes that the ECB would likely intervene directly on government bond markets to force down borrowing costs for the likes of Spain and Italy.
Madrid stocks slumped more than 5.0 percent as investors there looked in vain for the measures they had hoped would help stabilise Spain's borrowing costs while other European markets were down as well, reversing early gains.
The euro briefly topped $1.24 after Draghi spoke of possible ECB market intervention but then plunged on concerns that he announced no concrete measures.
At about 1235 GMT, the euro hit $1.2404, the highest level since June 5, but then quickly pulled back to $1.2220.
"As markets digest the fact the ECB has done nothing concrete to sort out Spain's problems, $1.20 comes back into view," said research director Kathleen Brooks at trading site Forex.com.
Draghi also said Thursday the idea of reducing the rate commercial banks earn for depositing money with the ECB to below zero was off the table for now.
Such a move was in "largely uncharted waters," Draghi said, adding the ECB had discussed a possible cut in its main benchmark interest rate but "in its entirety, decided this was not the time and that's it."
If commercial banks had to in effect pay the ECB to deposit money there, they might prefer instead to lend it out, thereby helping stimulate economic activity in a slowing Europe.
But Draghi said the European Central Bank is of one mind in its determination to preserve the embattled single currency.
"The endorsement to do whatever it takes to preserve the euro as a stable currency has been unanimous," Draghi said, acknowledging however that Germany's central bank had "reservations" on buying government bonds as one way of tackling the eurozone debt crisis.