The euro rose to its highest in more than seven months against the dollar and hovered near a nine-month peak versus the yen on Tuesday as signs of progress in US budget negotiations lifted overall market sentiment. The euro was last up 0.5 percent on the day at $1.3223 after hitting a high of $1.3232, its strongest level since early May. Traders said investors took out option barriers at $1.32, prompting more euro buying. The dollar index fell to a two-month trough of 79.260. The index was last quoted at 79.320, down 0.3 percent.

The euro was last down 0.4 percent at 8.7249 crowns. The yen slid against the euro, with the single currency rising 0.6 percent on the day to 111.09 yen, within sight of a nine-month high of 111.30 yen hit on Monday. The dollar was up 0.2 percent at 84.02 yen, having hit a high of 84.48 yen on Monday, its strongest since April 2011.

Copyright Reuters, 2012