"Taper terror" has investors once again running for cover, spurring a broad selloff this week in global equities and bonds, as well as the U.S. dollar and emerging market currencies. But, the euro – traditionally a risk-off victim – has been spared.
On Thursday, both the Dow and the S&P 500 finished 1.4 to 1.5 percent lower while Treasury yields spiked, as markets continued to gauge when the Federal Reserve might start to reduce its asset purchases. The selloff continued into Asia on Friday, with Japan's Nikkei falling 0.75 percent and futures are pointing to a lower open for European stocks.
Amid the market gyrations, the euro emerged relatively unscathed, climbing around a full penny against the U.S. dollar to touch highs of around 1.3360 Thursday, before paring slightly to trade at around 1.333 on Friday.
"It's a relative economic play," says David Forrester, a forex strategist at Macquarie. He notes some of the economic data out of the U.S. Thursday disappointed, with the Empire State Manufacturing, Philadelphia Federal Reserve business activity and industrial production indexes all lower than expected.
"Cyclical data point to growth still happening in the U.S., but it's not stellar," Forrester says, noting that European data in comparison showed the continent climbed out of its long recession in the second quarter. "They're polar opposites."
Gross domestic product (GDP) data for the euro zone showed second-quarter growth of 0.3 percent quarter-on quarter. This beat analysts' estimates for 0.2 percent, according to a Reuters poll. Earlier this month, euro zone flash composite purchasing managers index data, featuring components for the manufacturing and services industry, rose to an 18-month high of 50.4 in July, above the 50-mark that divides expanding activity from contraction and compared to June's 48.7.
"The data momentum has definitely improved in Europe over the past few weeks," says Sean Callow, senior currency strategist at Westpac. "That keeps the ECB on the sidelines. They won't be easing again anytime soon," he adds. "That helps the euro's cause."
Additionally, the crisis-hit region hasn't reached for the panic button in a while. Earlier in the summer, French President Francois Hollande even declared the crisis "over."
"It is debatable whether euro zone nations have done enough to improve the conditions that led to the euro crisis in 2010-12, but the bottom line is that we are in year four of the crisis and the euro has held together, so the market is no longer so worried about a disorderly break-up," says Greg Gibbs, senior forex strategist at RBS, in a note. "When there is no crisis fear, then the euro zone is like Japan pre-Abe, perpetually in deflation, but experiencing a perpetually strong currency."
To be sure, not everyone thinks the euro's step higher is significant.
(Read more: Euro zone recession ending, but what has changed?)
Emma Lawson, senior currency strategist at National Australia Bank, attributes much of the move to typical late summer volatility in the markets amid low liquidity. She notes the euro hasn't managed to break above highs earlier this year. In February, the euro traded around 1.3640 against the dollar.
"Unless we break out of that range substantially, we wouldn't read too much into this volatility in a day-to-day basis," she says.