The US dollar fell against the euro for the third straight day on Thursday as the common currency continued to bask in the glow of the recently announced 750 billion-euro ($828.90 billion) coronavirus recovery fund amid improved risk appetite, leading investors to favor riskier assets.
The euro was 0.49% higher against the greenback at 1.1057. The single currency has risen 1.5% over the past three sessions.
The EU executive unveiled a plan on Wednesday to support economies hammered by the pandemic, hoping to end months of squabbling over how to fund a recovery.
The euro's price action continues to be driven by global risk sentiment, even as market participants remain deeply skeptical that the EU recovery fund proposal will navigate the bureaucracy unscathed, said Simon Harvey, FX analyst at Monex Europe.
Overnight implied volatility gauges inched up to hit a one-month high above 8%, suggesting investors were prepared for unexpected moves in the common currency.
The US Dollar Currency Index, which measures the greenback's strength against six other major currencies, was down 0.36% at 98.555, its weakest in nearly two months.
The pound recovered partially from the previous session's sharp drop against the dollar after Wednesday's reports that Brexit talks are at an impasse.