A raft of positive economic data propelled the euro higher against the dollar on Wednesday and helped it briefly top the $1.32 level.

Market sentiment was given a boost after upbeat European manufacturing data and a sharp rise in US construction spending. US private sector payrolls remained steady for the month.

The euro later traded at $1.3159, from $1.3048 on Tuesday. Falling yields on Spanish and Italian bonds also bolstered appetite for the euro.

The dollar index, which measures the greenback against a basket of six other currencies, fell to 78.924 from 79.277 late Tuesday.

The dollar registered broad losses as risk appetite picked up on Wednesday but remained firm against the yen at ¥76.20 from ¥76.25.

Sterling changed hands at $1.5833 from $1.5759 the previous session as investors cheered a surprise return to growth in the UK manufacturing sector.

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