The dollar fell sharply after US inflation figures came in below expectations and so reignited talk of a US interest rate cut next year.
The figures showed both US headline and core CPI inflation were unchanged in November, against expectations for a 0.2 per cent rise in both.
At 2.48pm, the euro was trading at $1.3178, up from $1.3105 just before the data were released, while the pound rose to $1.9660 from $1.9564 previously. The dollar fell to $117.96 against the yen from $118.30 beforehand.