The euro rose against the dollar, making a new high for the day, after European Central Bank President Mario Draghi signaled Thursday that he was keeping his options open on interest-rate policy.
In a news conference after the ECB left its rates unchanged, Mr. Draghi said he saw "substantial downside risks" to the euro-zone economy in an "environment of high uncertainty," which initially knocked the single currency.
But he followed up by saying the ECB's Long Term Refinancing Operations were showing signs of bearing fruit, by staving off a deeper credit crunch and helping to stabilize the euro-zone's economy, giving the euro a lift.
In recent trade, the euro was at $1.2797 from $1.2706 late Wednesday.
The dollar was at ¥76.75 from ¥76.86. Sterling remained near three-month lows against the dollar after the Bank of England made no changes to its accommodative monetary policy; the currency was recently at $1.5319 from $1.5328 late Wednesday. The dollar bought 0.9462 Swiss franc from 0.9541 franc.
The euro had given back some gains earlier in the day on a sharp rise in weekly U.S. jobless claims that briefly dimmed the appetite for riskier currencies.
First-time claims for jobless benefits jumped 24,000 to 399,000 last week, well above the forecast for a rise of 8,000. That surprise tempered enthusiasm over growth prospects, hurting currencies that are often sensitive to global economic expansion. Positive U.S. economic data had buoyed such currencies in recent weeks.
The U.S. dollar staged a rally against growth-sensitive currencies like the Australian and Canadian dollars after jobless report. The U.S. dollar rose to C$1.0202 from C$1.0193 late Wednesday. The Australian dollar was at $1.0292 from $1.0311.
The BOE left its key rate unchanged at 1.25% and made no changes to its bond-purchasing program, currently at £275 billion ($421.52 billion). Sterling was largely unaffected as investors had expected this outcome, though earlier Thursday it was roiled by soggy industrial production data, hitting a three-month low against the dollar of $1.5281.
Spain successfully sold €9.986 billion ($12.69 billion) in bonds, twice the amount planned, as strong demand spurred it to front-load some of its hefty borrowing requirements this year. The strong result boosted currency traders' spirits.
Marc Ostwald, a strategist at Monument Securities, called the Spanish results "very impressive ... As tactics go, it is clear that getting as much done as quickly as possible in terms of funding a deficit is wise in the current environment."
Italy, meanwhile, saw a dramatic decline in its borrowing costs at an offering of 12-month bills, which pushed the yield on its 10-year benchmark bond to as low as 6.55% from more than 7% on Wednesday.
Analysts noted that the strong demand came as European banks parked less cash with the ECB than in previous days.
"It's tempting to put one plus one together and say banks just parked the money with the central bank, waiting for the right auction," a trader at a French bank said in London. "Still, it's too early to be optimistic, as there is still a lot of supply in the coming months and everything is still to play for."
Hungary also sailed through a debt auction, which boosted the forint to its highest level against the euro so far this year and supported other emerging European currencies.
In India, the central bank moved to contain rupee weakness by unloading dollars.
