The euro was seen on a pleasant note against the dollar for a third consecutive day with investors adding to long positions in high-yielding currencies amid a seemingly significant improvement in risk appetite. The dollar could come under more pressure, especially against higher-yielding currencies, in reaction to robust U.S. corporate earnings. Intel Corp reported results above expectations and gave an upbeat sales outlook, pushing S&P futures higher.
Greg Gibbs, currency strategist at RBS, Sydney said: "What we are seeing is that cash is being put back to work with all the negative news surrounding the euro zone receding. Some of the risk premium that was being attached to the euro zone is being taken off. The downgrade of Portugal was very much expected and I think we could see the euro rise a bit more from here."
The euro was firm at $1.2720. The euro jumped to three-week highs of 113.03 yen. The dollar was up at 88.83 yen, from 88.44 yen. Pound was up 0.1 percent $1.5190.