On Thursday, the euro consolidated the position against the dollar and the yen after falling earlier in the session, after a support by a sharp rise in government bond yields in Germany, on the day after European Central Bank President Mario Draghi said that investors should get used to high levels of volatility debt markets.
The EUR/USD rose 0.67% to 1.1349, the highest since May 18 departing from session lows 1.1232.
The yield on 10-year government bonds in Germany jumped to its highest level since September, reducing the gap from their American colleagues.
The yield on German bonds serves as a reference point for European financial markets, and the growth of profitability increases the euro against the dollar. Yield increases as the price drops.
Speaking at a press conference on Wednesday, after the European Central Bank decided to keep interest rates at a record low, Mario Draghi said that the markets have become accustomed to periods of high volatility in European bond markets, which, he said, will not affect the decisions on monetary policy.
The ECB also revised its inflation forecast for this year to 0.3% from 0%, and said that the inflation rate is expected to continue to grow in 2016 and 2017.
The forecast was revised after recent inflation data, released on Tuesday, showed that euro zone consumer prices rose in May for the first time in six months.
The euro fell early in the session due to concerns over a possible Greek default.
Yesterday's talks between Prime Minister Alexis Tsipras of Greece and President of the European Commission, Jean-Claude Juncker, held in Brussels, resulted in a lack of arrangements necessary to unlock the large financial aid before Greece runs out funds to repay debt.
However, according to reports, the two sides are close to an agreement, and it is expected to hold further talks on Friday.
On Friday, Greece is obliged to pay 305 million euro to the International Monetary Fund, and its recovery program expires at the end of this month.
The euro rose to a fresh five-month high against the yen, with 0.44%, EUR/JPY got to 140.69 after falling to a minimum of 139.56 earlier.
The dollar fell against the yen; USD/JPY pair dropped to 124.04 from the 12.5-year peak of 125.05 on Tuesday.
Data published on Wednesday showed that the level of employment in the private sector of the US rose in May to 201000, higher than the expected 200000, indicating that the recovery in the labor market persists.
The USD index, which measures the USD against the basket of six major currencies, went down 0.47% to two-week low 94.90, being under pressure of the stronger euro.