On Wednesday the euro rose to one-week highs against the dollar amid lingering selloff in European government bonds. German Bund yields hit 1 percent for the first time since September 2014, as investors digest a stronger dynamic in European economic data.
Uncertainty around Greek debt crisis continued to weigh on market sentiment.
EUR/USD was up 0.31% to 1.1315.
A view that inflation is likely to rise in the upcoming months has prompted market participants to reestimate their outlook for ultra-low government bond yields in Europe.
The benchmark 10-year Bund
yield, which moves in the opposite direction to the price, edged
above the 1 percent mark in early European trade and last stood at 1.015
percent.
Bund yields surged this month trading currently more than double the level it traded at the start of the month.
It is also almost 100 basis points above a record low of 0.05 percent hit in April after the European Central Bank launched a hefty bond-buying program to stump up the region's economy.
Fresh selling in European government bond markets helped push the 10-year Treasury yield to a new 8-month peak at around 2.467 percent, CNBC reports.
Meanwhile, investors were closely watching the situation around the Greek debt talks. Time is running short over the cash-for-reforms deal that Athens needs to avoid a debt default.
Greek Prime Minister Alexis Tsipras is to meet German Chancellor Angela Merkel in Brussels on Wednesday.
