The European currency rallied from a 4-year low against the U.S dollar on Wednesday, as traders bought the EUR on speculation the European Central Bank will announce further steps to halt the region's debt crisis.

In early trading, the EUR was up 1.6% against the Dollar at $1.2378 after strengthening as high as $1.2399. The single currency hit session highs after the release of the Federal Reserve's minutes of its latest meeting, which showed the Fed upgraded its outlook on the U.S. economy, boosting risk appetite in the market.

The EUR has fallen about 15 percent against the U.S dollar so far this year, hammered by concerns that Europe's debt problems and austerity measures could hamper the Euro Zone's economic recovery. Traders said that the EUR next support is seen at $1.2133 and if that level is broken, the next support level would be at the psychologically important $1.2000.