A two-day EU summit begins Thursday, and the bloc is ready to set up its planned EU stimulus without Hungary and Poland, which are maintaining their veto of the EU budget.
The Australian dollar was down 0.1pc at 0.7358, though earlier it rose to a near three-month high of 0.7374, and the Canadian dollar was neutral at 1.3007 against the U.S. dollar.
The spread between German and Italian government bond yields -- essentially the premium Italy is paying for its debt -- stood at 117 basis points, close to a two-and-a-half year low.
Gross domestic product in the 19 countries sharing the euro surged 12.7% quarter-on-quarter in the third quarter after contracting 11.8% in the second, the European Union’s statistics office, Eurostat, said. Economists polled by Reuters had expected a 9.4% quarterly rise.
Stocks rallied after US President Donald Trump said on Thursday talks with Congress had restarted on targeted fiscal relief, after calling off negotiations earlier this week.
Norges Bank joined its global peers in striking a dovish stance, saying a resurgence in COVID-19 infection rates might put the brakes on any economic upswing.
The dollar was up 0.1pc against the Japanese yen at 106.06 as US 10-year Treasury yields rose to two-week highs before a quarterly US refunding auction on Tuesday.
The euro's rally was triggered by European Union leaders striking a deal for a region-wide rescue plan, a huge step toward both recovery and a stronger union.
No outcome is expected at the summit until evening, at best, but an agreement or a collapse in the talks would have a major impact on the currency when trading resumes.
Markets appear to be constructive on the euro in an anticipation of progress towards the recovery fund at the EU summit over the weekend.
The dollar was on the defensive, particularly against other growth-leveraged currencies such as the Australian dollar, following an uptick in U.S. inflation and news of progress in vaccine development for COVID-19.
The US dollar index, which measures the safe-haven greenback against a basket of six rival currencies, was down 0.31% to 96.265.
The European Union's approval of its recovery fund may see the euro test $1.150 with a break leading to a test of crucial resistance levels around $1.180.