The euro surged to a fresh three-year high on Thursday after European Central Bank President Mario Draghi said economic data pointed to "solid and broad" growth with inflation likely to rise in the medium term from subdued levels.
The euro jumped about 1 percent to $1.2536, its highest since mid-December 2014. It was last up 0.61 percent at $1.2482.
Draghi warned that the surge in the euro was a source of uncertainty and said the ECB might have to review strategy if U.S. comments on the benefits of a weak dollar lead to a change in monetary conditions.
The dollar had slipped against the euro on Wednesday after U.S. Treasury Secretary Steve Mnuchin said he welcomed a weaker greenback.
Some market participants had been expecting Draghi to take a firmer stance addressing the euro's potentially damaging surge against the dollar.
"Overall, the comments regarding the exchange rate were benign," said Eric Viloria, currency strategist at Wells Fargo Securities in New York.
"There was a lack of any forceful comments with respect to the recent euro strength," he said.
The single currency has gained more than 3 percent already this year after double digit gains last year amid a broad-based dollar sell-off that intensified on Wednesday when U.S. Treasury Secretary Steven Mnuchin said a weaker dollar was "good for us."
Mnuchin, whose comments were a departure from traditional U.S. currency policy, said on Thursday that he was not concerned where the dollar was in the short term.