On Thursday, the euro hit a five-week high against the dollar and the yen as solid U.S. economic data and signs of ultra-low interest rates for years to come from the Fed stoked appetite for riskier assets.

Last week, new claims for unemployment benefits rose but the underlying trend continued to point to improving conditions in the labor market. It was also shown by the data that new orders for U.S. manufactured goods rose more than expected in December, while a gauge of business spending plans rebounded.

U.S. central bank was ready to offer the economy additional stimulus, Federal Reserve Chairman Ben Bernanke said.

"In the afterglow of the Fed's decision yesterday to keep interest rates low for a longer period of time, today's generally positive U.S. data gave investors a fresh reason to move into riskier assets," said Joe Manimbo, market analyst at Travelex Global Payments in Washington.

The euro advanced to a session high of $1.3176 after release of the U.S. data and the single currency rise as high as 102.20 yen before trading more recently at 102.07 yen.

The single currency was also believed to be boosted by media reports that the private creditors of Greece were willing to lower their "final offer" of a 4 percent interest rate on new Greek bonds.

"The markets are trading in a way that they believe a disorderly Greek default is unlikely," said Alan Ruskin, head of G10 currency strategy at Deutsche Bank in New York. Still, he noted, "we've seen so many false alarms in terms of resolution."