The euro crept up further from last week's eight-month low against the dollar and rose versus the yen today, regaining its poise after heavy selling triggered by a political crisis in the European Union.
Investors were encouraged by comments from top euro zone policymakers which calmed worries that the common European currency might not get enough political support after two founding members of the bloc rejected the European constitution.
In recent days various officials have said that calls from a government coalition party in Italy for a referendum on bringing back the lira were absurd, scandalous and irresponsible.
"You have to see the moves in the euro in the context of the sharp falls we have had," said Adrian Foster, head of currency strategy at Dresdner Kleinwort Wasserstein in London.
"The impact of the constitution votes is lingering but the market has seen that euro zone officials are (singing) off the same hymn sheet, which is an underlying positive for the euro."
The dollar was also struggling after Federal Reserve Chairman Alan Greenspan failed to offer the currency support.
Earlier this morning the euro traded a quarter percent up on the day at $1.2313, more than a cent above an eight-month low of $1.2157 last week.
The euro also gained a third of a percent versus the yen to trade at 131.41 yen.
Traders said the yen was sold after a report in the Financial Times newspaper suggested several foreign companies might pull out of Japan if proposed changes to the country's commercial code, which would increase their costs, go through. The dollar was up 0.1 per cent at 106.74 yen.