Investing.com - The euro rallied against the other major currencies on Tuesday, jumping 1% against the broadly weaker dollar amid a renewed selloff in European government bond and stock markets.
EUR/USD hit highs of 1.1274 and was last at 1.1270, up 1.03% for the day.
The single currency was boosted as a fresh selloff in global bond markets undermined greenback strength. German 10-year bund yields jumped, narrowing the gap with their U.S. counterparts.
German bund yields act as benchmarks for European financial markets and higher yields push the euro higher against the dollar. Yields rise as prices fall.
Weakness in bond markets and ongoing concerns over Greece also weighed on European equities.
Greece repaid a €770 million loan installment to the International Monetary Fund early Tuesday, easing concerns that it was on the verge of default, but uncertainty over the country’s future in the euro area persisted.
Athens is scrambling to reach an agreement with its international creditors on a package of economic reforms in order to access fresh bailout funds and avert a liquidity crunch.
The single currency gained ground against the yen and the pound, with EUR/JPY advancing 0.91% to 135.16 and EUR/GBP up 0.43% to 0.7189.
Elsewhere, sterling rose to five-month highs against the dollar, with GBP/USD up 0.6% to 1.5678.
The pound was boosted by data showing that U.K. industrial output grew at the fastest rate in six months in March, easing concerns that the rate of economic growth is moderating.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.83% to 94.33, re-approaching last week’s two-month trough of 93.96.