The euro soared to a five-year high versus the struggling pound and reached a three-week high against the yen. Most euro zone bond yields rose to two-week highs, a day after a Bloomberg article cited sources as saying the European Central Bank would probably wind down its bond buying gradually before ending quantitative easing. An ECB media officer said in a tweet later on Tuesday that the ECB had not discussed reducing the pace of its monthly bond buying.
Still, regional bond yields rose with the two-year German Schatz yields at -0.678 percent after hitting its least negative level in 1-1/2 weeks.
The euro rose to 88.43 British pence, a level last seen five years ago before retreating to 87.80 pence in U.S. trading.
The euro zone common currency rose 0.6 percent to 115.90 yen after touching its highest in three weeks, while it was little changed versus the dollar at $1.1207.
"The headlines that the ECB is considering tapering has led to some buying in the euro, especially against the yen," said
Yujiro Goto, currency strategist at Nomura.
Sterling rose 0.2 percent to $1.2755 after falling earlier Wednesday below $1.27 for the first time in over three decades on worries that Britain's separation from the European Union could be rocky and have adverse economic consequences.