Early trade: Euro rallies versus dollar

The euro rose more than 1 percent against the dollar on Thursday after data on the US housing market and the eurozone manufacturing and services sectors revived investors' appetite for risk. The yen erased most early gains versus the dollar and dropped sharply against other currencies as US stocks rallied, helping improve sentiment a day after Federal Reserve chairman Ben Bernanke painted a gloomy outlook for the US economy.
The euro was last up 1.1 percent at $1.2906, after hitting a session peak at $1.2933 on electronic trading platform EBS. It also gained 1.1 percent to 112.31 yen. The dollar was down 0.1 percent at 87.01 yen, rebounding from a session low of 86.35, according to Reuters data. The dollar was trading down 1 percent versus a currency basket at 82.557 after slipping to a low 82.462.