Investing.com - The euro rose to one-week highs against the dollar on Wednesday as a selloff in European government bonds continued, but uncertainty over Greece continued to weigh.
EUR/USD was up 0.7% to 1.1360, the most since June 4.
The euro moved higher as German 10-year bund yields rose to the highest levels since September 2014.
German bund yields act as benchmarks for European financial markets and higher yields push the euro higher against the dollar. Yields rise as prices fall.
Sentiment on the euro remained fragile as concerns over Greece’s deadlocked debt negotiations weighed.
On Tuesday European officials dismissed economic reforms put forward by Athens, saying they did not do enough to meet creditors’ demands.
Athens was expected to resume talks on a cash-for-reforms deal with its international lenders later in the day.
Greece’s bailout agreement with the European Union and the International Monetary Fund is set to expire at the end of this month and it cannot make further debt repayments without a new deal.
The euro was lower against the yen, with EUR/JPY last at 139.45 after falling as low as 138.53 earlier.
The yen rallied on Wednesday after Bank of Japan Governor Haruhiko Kuroda suggested Wednesday that the relative value of the yen may not continue to fall.
Kuroda said the real effective exchange rate showed that the yen's levels were “significantly low".
The real effective exchange rate measures the yen’s levels relative to the currencies of Japan’s trading partners.
Kuroda also said the dollar may not necessarily rise further against the yen if the Federal Reserve raises interest rates, as the possibility of rate hikes is already priced into the market.
The dollar fell to two-week lows against the yen following the remarks.
USD/JPY fell 1.3% to 122.46, the weakest since May 26 and was last at 122.73, well below the 13-year peaks of 125.84 struck last Friday after an above forecast U.S. jobs report underlined expectations that the Fed could start to raise rates at its September meeting.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.86% to three-week lows of 94.35.