Strong euro zone survey figures and hopes of progress on Brexit negotiations pushed the euro above $1.22 against the US dollar today for the first time since April 2018.
The euro has risen nearly 13% since the European Union announced a recovery fund in May.
Stronger economic activity data in recent months have also boosted bets that Europe is likely to outperform the US in the coming months.
Those expectations got a further boost with manufacturing survey data from Germany and France indicating that Europe's biggest economies may be recovering quickly.
Against the US dollar, the euro rose 0.31% to $1.2186 after earlier reaching as high as $1.2211.
"European PMIs, Brexit and a likely dovish Fed are boosting risk appetite in the currency markets," said Kenneth Broux, a strategist at Societe Generale in London.
Ursula von der Leyen, the president of the European Commission, said she could not say whether the EU and Britain would reach a trade agreement, but progress had been made and the next few days would be critical.
Investors are also keeping an eye on the outcome of a two-day Federal Reserve policy meeting later this evening.
Policymakers are expected to keep the US overnight interest rate near zero and signal it will stay there for years to come, a decision that analysts say will further boost risk sentiment.
Meanwhile, the Swiss franc briefly gained against the dollar after the US Treasury labelled Switzerland and Vietnam as currency manipulators.
It was last at 0.8846, with the dollar down 0.9% against the currency on the day.
The Treasury said that up to June 2020 both Switzerland and Vietnam had intervened in currency markets to prevent effective balance of payments adjustments.
Meanwhile Bitcoin smashed through $20,000 for the first time today, its highest ever.
Bitcoin has gained more than 170% this year, buoyed by demand from larger investors attracted to its potential for quick gains, purported inflation-resistant qualities, and expectations it will become a mainstream payment method.
