German bund yields, the benchmark for European borrowing costs, hit a peak of 0.99 percent on Thursday, where the spread between them and U.S. Treasury yields with same maturity narrowed to its tightest in four months.
On Wednesday, the ECB lift its inflation forecasts for 2015 to 0.3 percent in 2015, instead of 0.0 percent estimate in March.
A report released this week showed that euro area consumer prices soared to 0.3 percent in the year through May.
Although Greece has not reached an accord with its creditors, the euro rose on hopes the deal would be reached soon as negotiation showed progress.
Dutch Finance Minister Jeroen Dijsselbloem said the negotiations with Greek Prime Minister Alex Tsipras held on Wednesday evening were “good” and that talks between the Greek government and its creditors will resume “in a few days.”
Tsipras calmed down investors by revealing the government in Athens is due to repay the 300 million euros to the IMF on Friday.
Against the dollar, the euro advanced for a third straight session to trade around 1.3414 as the dollar remained under pressure before the release of U.S. non-farm payrolls data on Friday.
Later in the day, the U.S. will release its unemployment claims data for last week, where initial jobless claims may show a drop to 280,000 from 282,000 a week earlier.
The EURJPY resumed its rally for an eight straight session to trade around 140.78.