The euro firmed across the board on Tuesday after data showing German industrial orders beat forecasts, but expectations the European Central Bank could ease monetary policy further could limit its gains.
The Reserve Bank of Australia, meanwhile, stunned the market earlier in the global session by cutting interest rates to a record low, undermining the Australian dollar, which fell to its weakest level in two months versus the U.S. currency.
The euro hit a session high of $1.3131 in the wake of the German economic data and was last up 0.1 percent at $1.3083. Industrial orders for March rose 2.2 percent from February, beating a forecast of a 0.5 percent drop and providing some relief to the single currency.
"The data offered a hopeful sign for recovery, which lent mild support to the euro," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. "Still, the general outlook for the region is decidedly less auspicious, particularly after ECB President (Mario) Draghi on Monday again stated that bank officials were on data watch and persistent weakness in the core would offer scope for another rate cut."
(Read More: ECB's Coeure Says Rates Can Go Even Lower)
But Camilla Sutton, chief currency strategist at Scotiabank in Toronto, believes the euro is better supported than the dollar in the near term because the European Central Bank is not engaged in the type of aggressive monetary stimulus the Federal Reserve has undertaken.