The euro extended four-month highs to the U.S. dollar on Thursday, following a surge in European bond yields on Germany's proposed 500 billion euro ($539.85 billion) infrastructure fund and overhaul in borrowing limits.

THE Australian and New Zealand currencies clung onto gains on Thursday after the US offered some tariff relief for automakers, while the surprising strength of the euro pinned the greenback at four-month lows.

The euro hit a fresh year-to-date high versus the greenback amid renewed bets that a ramp-up in European defense spending will provide a much-needed boost to the region’s economy.