A survey showing a surge in German investors' optimism pushed the euro higher and European bonds lower today.
The closely watched ZEW survey showed German investor sentiment improved to its best level in almost two years in December, helped by strong export demand, with the key indicator leaping a remarkable 22.9 points to 61.6.
The euro rose around 0.2 U.S. cents to $1.1940 after the ZEW data, but the gains proved short-lived as it retreated to pre-data levels around $1.1920.
The March Bund future fell 20 ticks to 120.65.
Gold slid more than 1 per cent to $522 an ounce, however, amid heavy selling in Tokyo futures after this month's feverish buying took it to levels above $540, its highest since 1981.
Investors are awaiting the US Federal Reserve's interest rate decision later this evening. The Fed is expected to raise rates for a 13th straight time to 4.25 per cent, but the focus is whether it will signal in its post-meeting statement that interest rates are near their peak.