(Reuters) – The euro rose against the dollar and yen on Monday due to encouraging German business data and remarks from a top European Central Bank official that cast doubts on whether the bank will take aggressive stimulus measures in the near future.

As the euro rebounded from a near two-year low against the greenback, the dollar index pulled back from a near 4-1/2-year high set earlier in the day. The Japanese market was closed on Monday for a holiday.

A stronger-than-expected German business survey for November offered hope that Europe’s largest economy was gaining momentum after skirting a recession last quarter.

ECB Governing Council member and head of the Bundesbank Jens Weidmann said more ECB measures to solve low inflation are difficult and could face legal limits.

“It looks like there’s some discord within the ECB before its Dec. 4 meeting and a step down from government bond purchases,” said Christopher Vecchio, currency analyst at FXCM in New York.

Weidmann’s repetition of his long-held view came after ECB President Mario Draghi stressed on Friday that “excessively low” inflation had to be raised quickly. That sent the euro on its biggest daily drop in 2-1/2 months.

The euro gained 0.4 percent to $1.2437 after trading as low as $1.2359, near a two-year low hit earlier in the month.

It was up 0.8 percent at 147.08 yen, erasing an earlier loss during Asian trading.

The dollar index, which measures the greenback’s value against a basket of six currencies, touched 88.440, its highest since June 2010, before easing to 88.131, down 0.2 percent from late Friday.

The dollar clung to gains against the yen as traders speculated that the Japanese and Chinese central banks would further ease monetary policies, which would erode their currencies.

China might be ready to lower interest rates again after Friday’s surprise rate cut in an effort to stem deflation, sources familiar with its policymaking told Reuters.

The dollar gained 0.4 percent against the yen to 118.27 yen. It hit a seven-year high of 118.98 yen last week after Prime Minister Shinzo Abe called a snap election and delayed a planned sales tax hike.

Read more: Euro rises on German data, ECB’s Weidmann, dollar slips

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