The euro rose against the dollar for the first time in four days on Friday, bouncing from a two-year low as Chinese economic data mitigated concerns about global growth, prompting investors to take on risk and pare bets against the single currency.
The euro had earlier come under pressure after a surprise cut in Italy's credit ratings by Moody's highlighted the risk that the debt crisis could potentially engulf Italy, the euro zone's third-biggest economy. The euro last traded at $1.2234, up 0.3 percent, after falling as low as $1.2160 earlier, marking the lowest level since mid-2010.
The euro also rose against the yen, trading 0.3 percent higher at 96.94 yen. Against the yen, the dollar was last down 0.1 percent at 79.18 yen, according to Reuters data.