The euro was propelled to a fresh four-month high against the dollar after strong euro-zone data as well as a confident and optimistic speech by European Central Bank President Mario Draghi earlier on Tuesday.
EURUSD reached close to the key $1.34 level, tested twice after being lifted by ZEW sentiment data for both the euro area and Germany.
German economic sentiment improved by more than expectations this current month and gained 2.1 points to 38.5 compared to a 36.4 reading last month. Analysts had expected the index to increase to 38.1 points. A level above zero indicates optimism, while below 0.0 indicates pessimism.
Also, the Euro zone economic sentiment reading rose to 30.6 in June from May’s 27.6, more than forecast for a reading of 29.4.
Meanwhile the euro also strengthened on ECB President Draghi’s speech in which he sounded confident about the outlook for the euro area.
Elsewhere, the dollar is broadly stronger as markets anxiously turn their focus to the key Federal Reserve policy setting meeting which began today and ends tomorrow with a statement and press conference by Ben Bernanke.
This led to a weaker yen, as USDJPY rose to 95.75, gaining 1 percent from Monday. EURJPY also rose due to the stronger euro, climbing to 127.81