Strong German economic growth data drove the euro to a three-week high on Tuesday and gave European stocks a lift after five days of falls put them at a two-month low.
The uplift to sentiment came after disappointing Chinese industrial and retail figures had subdued Asia, with investors also pondering whether a marked flattening in the U.S. yield curve might be a harbinger of a more global slowdown.
There was no sign of that in German where an 0.8 per cent third-quarter growth reading beat forecasts and showed the economy growing at annualized rates of more than 3 per cent.
The euro jumped to $1.1696 versus the dollar on the figures and reached a one-year top against Sweden's crown after inflation figures there came in weaker than expected.
"It is not the dollar that is weak, it is the euro that is strong," said John Hardy, Saxo Bank's head of FX strategy.
Combined with signs of a move up again in European bond yields, that suggested some traders were back to pricing in an end to the European Central Bank's stimulus, he said.
Also ahead on Tuesday were 13 central bank speakers, including the heads of the U.S., European, British and Japanese central banks The mood in Asia wasn't nearly so bullish.
China's retail sales rose 10 per cent on the year in October, while industrial output grew 6.2 per cent. But both were under market forecasts and briefly hit the Australian dollar, which is often used as a liquid proxy for China because of the country's vast exports of raw materials to China.
MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.17 per cent after two sessions of declines, while Australia fell 0.9 per cent.
Japan's Nikkei managed to recoup 0.4 per cent after four sessions of losses, but that was not enough to shift MSCI's 47-country world index out of the red until Europe opened.
On Wall Street, a sharp drop in General Electric shares on Monday had been offset by gains in high dividend-paying sectors including consumer staples and utilities.
The Dow rose 0.07 per cent, while the S&P 500 added 0.10 per cent and the Nasdaq 0.1 per cent.
Elsewhere, sterling dropped after slightly softer than forecast inflation and a hit three week low. It was at $1.3091, also pressured concerns British Prime Minister Theresa May may be losing her grip on power.
May's blueprint for Britain's departure from the European Union faces a test starting on Tuesday, when lawmakers try to win concessions on legislation to sever ties.
The dollar was up 0.2 per cent at 113.88 yen after bouncing from 113.25 support overnight.
A rise in U.S. bond yields has generally made it more attractive to buy dollars with money borrowed in low-rate currencies like the yen and Swiss franc.
Figures on Monday from the Commodity Futures Trading Commission showed the net short position in the Japanese yen to be the largest since January 2014 and in the Swiss franc to the biggest since December 2016.
Yields on Treasury two-year notes hit a fresh nine-year high of 1.6910 per cent on Monday, shrinking the spread to 10-year debt to near its smallest since 2007.
The trend in part reflects market wagers the Fed's plans to raise rates in December and two or three times next year will slow the economy.
Tom Porcelli, chief U.S. economist at RBC Capital Markets, said history suggested a flatter, and particularly an inverted, yield curve was "compelling as an early warning sign" of recession.
But with the average amount of time it has taken the curve to go from flat to inverted being 18 months and another 18 months to go from inverted to recession, it suggests the expansion still has multiple years in it, said Porcelli.
In commodity markets, gold inched down to $1,272.50 an ounce. The metal has stayed broadly within $15 an ounce of its 100-day moving average, currently at $1,277 an ounce, for most of the last month.
Oil prices held in a tight range as support from Middle East tensions and record long bets by fund managers balanced rising U.S. production.
U.S. crude was off 19 cents at $56.57, while Brent crude futures eased 23 cents to $62.92 a barrel.