"Adding the stronger euro to the downside risks for price stability opened the door for new policy action if the euro strengthens further and starts to weigh on the growth and inflation projections," said ING's Brzeski.

Draghi's remarks on the euro came after a cautiously upbeat assessment of the prospects of the eurozone economy. As well as predicting that inflation will likely fall below the target in the coming months, Draghi said economic growth would likely resume thanks to an "accommodative" monetary policy, an improvement in financial market conditions and a pick-up in global demand.

Though Draghi said risks to inflation are "broadly balanced," he noted that risks to growth are "to the downside."

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Pylas contributed from London.

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