The euro rose on Tuesday after China urged that tough talk from European leaders on the debt crisis be backed up with action, but the gains were likely to be short-lived amid fears of more ratings downgrades. China's Vice Premier Wang Qishan said Beijing, which has invested an undisclosed portion of its $2.65 trillion reserves in the euro, had played its part to ease Europe's plight and held out hope that a turning point was near.
The comments triggered a short-covering rally, which saw the euro push above $1.32 and regain its 200-day moving average. In early New York trading, the euro rose 0.3 percent at $1.3159, extending a rebound from Monday's trough of $1.3094, its lowest since December 2. It earlier rose as high as $1.3202 on trading platform EBS.