The euro rallied on Thursday (20 July), shrugging off comments from European Central Bank President Mario Draghi, who said inflationary pressure remained weak, as he called for a prudent approach over any potential changes to the bank's quantitative easing (QE) programme.
The common currency jumped 0.42% and 0.83% against the dollar and the pound respectively, trading at $1.1563 and 0.8915p respectively.
Draghi struck a positive tone on growth and said that more detailed QE adjustment discussions would come in the autumn, although no specific date has been set.
The ECB president added structural reforms would have to be gradually stepped up, indicating an early tightening of monetary policy would jeopardise the economic recovery in the Eurozone.
"What we learned from today's meeting though was that the ECB probably doesn't have anything to worry about," said Oanda's senior market analyst Craig Erlam.
"The market is already working off the assumption that the ECB will gradually phase out bond buying, with the program likely ending by the end of next year, possibly even the third quarter.
"This was made clear when the euro rallied despite the repeated insistence from Draghi that tapering wasn't discussed."
Kathleen Brooks, research director at City Index, added: "Draghi and the ECB may have been dovish at today's meeting, however that hasn't stopped the euro from rallying to key resistance levels.
"The reason is because there is nothing new from today's meeting, the ECB statement is virtually unchanged from last time and no news means no change in the euro's trend, which for now is higher."
Earlier, the ECB announced it will continue to make purchases under the asset purchase programme (APP) at the current monthly purchase pace of €60bn (£53.5bn, $69.3bn), adding it will also keep interest rates unchanged at zero in line with market expectation.
The bank added the APP will run until the end of December 2017, or until policymakers see a sustained adjustment in the path of inflation consistent with its inflation aim.
"In the forward guidance 'adjustment' was the key word which many had their eyes on. If it was removed then we could have seen the euro moving higher," said Naeem Aslam, chief market analyst at Think Markets UK.
"The forward guidance as it stands has given a dovish message for the market."
Meanwhile, the pound was on the back foot against the dollar, losing 0.37% to $1.2969, despite some better-than-expected retail data.
According to the Office for National Statistics (ONS), retail sales rose 0.9% on a monthly basis last month, exceeding expectations for a 0.5% gain and rebounding from the upwardly revised 1.5% drop recorded in the previous month.
In June, retail sales rose 3% year-on-year, sharply higher than the 0.6% increase recorded in the previous month and nudging ahead of forecast for a 2.5% increase. That left retail sales up 1.5% on a quarterly basis.