Separately, current account data from the euro zone showed portfolio inflows continued at a brisk pace, a factor that has been supporting the euro in recent months. "This latest release (of the lending survey) should give the ECB's Governing Council a little more breathing space as it continues to assess the broader recovery picture," said Timo del Carpio, an economist at RBC Capital Markets.
The euro was up 0.5 percent at $1.1380, recovering from a 10-day low struck on Monday. It had started to edge up after ECB governing council member Christian Noyer said late on Monday the European Central Bank's quantitative easing programme was well calibrated and did not need to be adjusted, following similar words from Austrian central bank chief Ewald Nowotny. Nowotny had pointed to the need to look at further ways to stimulate a still struggling euro zone economy, and major banks including Barclays and Goldman Sachs started this week by calling for the euro to weaken into Thursday's meeting.
"The Noyer comments are important," said a senior trader at one international bank in London. "It does seem as if they're trying to back the market away from thinking there's going to be another easing announcement. The market is still short, and it will probably need a push up to $1.15 to burn those guys out."
The Canadian dollar, a big loser on Monday ahead of election results that gave a shock victory to Liberal leader Justin Trudeau over Prime Minister Stephen Harper's Conservatives, was back in positive territory in European trade. It last traded at $1.3008, up 0.1 percent on the day. "With the election out of the way, near-term CAD direction will continue to be influenced by crude oil prices," analysts at Societe Generale said in a note. Bank of Canada policymakers meet on Wednesday, with a large majority of analysts polled by Reuters seeing no change in interest rates.