LONDON: The euro jumped to one-week high following positive economic data on Tuesday, while other currencies also rose after White House trade adviser Peter Navarro walked back on his comment that the US trade deal with China was "over".
Elsewhere, Scandinavian currencies rebounded as well, with the Norwegian crown rallying more than 1% against the dollar and by 0.7% versus the euro.
The euro was bolstered by French business activity rebounding more than expected in June, returning to growth after three months of an unprecedented downturn, as well as data showing the euro zone downturn eased again this month.
"The positive news ... is that activity is starting to rebound; the less positive news is that demand is lagging and remains subdued," said George Buckley, economist at Nomura.
However, excluding the possibility of a second wave, demand should also recover, even if at a slower pace, as consumers and firms' confidence increases."
The euro rose 0.6% to $1.1325, its highest level since June 16.
Navarro said on Monday the trade deal "continues in place" after his earlier remark stoking volatility in markets already frazzled by the coronavirus pandemic.
He said his "over" comment had been taken "wildly out of context", while US President Donald Trump said in a tweet the deal with the China was "fully intact".
The Australian dollar rose to a one-week high, having fallen earlier, and the safe-haven Japanese yen slipped to a six-day low as a result of Navarro's walk-back.
Euro overnight volatility rose to nearly 10%, the highest in nearly three weeks.
The wild swings in currencies come as the market is torn between hopes of economic re-opening in many parts of the world and signs coronavirus infections are rising in the United States.
The Australian dollar traded up 0.7% at 0.6950, after rising to 0.6977, its highest level since June 16. Before that, it had fallen as much as 0.7%.
The offshore Chinese yuan pared much of its earlier losses to trade flat at 7.0559 per dollar in the offshore market.
The safe-haven Japanese was last neutral at 106.92 against the greenback.
The Norwegian crown has bounced back from March selloffs and with its central bank already outlining plans to raise interest rates, it looks set for more gains.
Oil-rich Norway has suffered less from the coronavirus pandemic than its neighbours, so the government has been able to open its borders, albeit to only a few countries with similarly low numbers of infections.
Some indicators have bounced back, such as new car registrations up 8% in May after tanking 40% in April on a month-on-month basis. On top of that, Norwegian house prices rose 1.4% in May.
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