The euro recovered on Thursday from its weakest since late June 2017 and the dollar fell after news that a Chinese delegation will travel to the United States (US) for trade talks, with investors buying back into currencies hit hard in the recent sell-off, reports Reuters.
Many emerging market currencies also rose, clawing back some of Wednesday's losses thanks to easing fears over the knock-on effects from a slide in the Turkish lira.
Global equity markets were mixed, however, underlining how nervous investors remain.
"That China and the US are beginning to talk again is supporting the market," said Commerzbank currencies strategist Thu Lan Nguyen. "As the (Turkish) lira did not depreciate further, that has taken out some tension from the market."
She also emphasised that the currency crisis in Turkey is far from over because authorities have yet to tackle the root causes.
More important for major currencies on Thursday were developments in the months-long trade conflict between the United States and China.
China's Ministry of Commerce said it had received an invitation from the United States for talks to be held with US Under Secretary of Treasury for International Affairs David Malpass.
The euro rose 0.2 per cent to $1.1367 EUR=, away from Wednesday's low of $1.1301.
The dollar, which has gained on bouts of investor jitters as traders seek safety in the higher-yielding and most liquid currency, fell after a recent strong run. The dollar index slipped 0.1 per cent to 96.613 .DXY.
China's yuan, which has fallen in recent months on concerns about the impact on its economy of the trade conflict with the United States, gained 0.7 per cent in offshore markets to 6.9005 CNH=.
Emerging market currencies bounced across the board, including the South African rand ZAR=, the Mexican peso MXN= and Russian rouble RUB=.
Turkey's lira rallied about 3.0 per cent to 5.7923 TRY= before a presentation by Finance Minister Berat Albayrak to investors, but is still down 34 per cent against the dollar this year.
