The euro pullback from yesterday's high at 1.2355 has found support at 1.2245 ahead of the European session, and the pair has soared about 150 pips higher, reaching a 3-week high at the 1.2390 price level on good demand for Spanish debt.
The focus is now on the results of the Spanish bank stress tests, due to be released later in the day.
USD traders are also awaiting a string of data from the American economy at 12:30 GMT. To be released are the US Unemployment Claims figure, the Philly Fed Manufacturing Index, CPI data, and the US Current Account number. The US dollar may be able to regain some of its recently lost strength if these figures can prove positive.