The European currency rebounded on Wednesday after steep losses in the previous session as investors concluded China's unexpected monetary tightening would not derail growth in the world's third largest economy.

The EUR traded near a 1 month high against the U.S Dollar before a report today economists expect will show European Industrial Output gained in November. The EUR traded higher at $1.4545 after it earlier hit $1.4582, its highest since Dec. 16. Analysts said that demand from Asian sovereign entities helped support the single European currency as well as bullish technical indicators.

The European single currency strengthened against the Yen after Greek Finance Minister said the nation is on the right track to solve its problems and does not need bailing out. The EUR gained to 132.21 Yen from 131.79 yesterday, after earlier dropping to 131.52, the weakest since Jan. 6.

Market players will keep an eye on the European Central Bank (ECB) policy meeting due at 13:30 GMT. The ECB expected to keep its benchmark interest rate close to a record low this year as inflation stays below its limit amid a sluggish economic recovery.