The euro appreciated against its most major rivals in the European session on Wednesday, as German 10-year bond yield rose to the highest level since May 2019, supported by rate hike expectations from the European Central Bank.

The yield on the 10-year German bund reached as high as 0.0220 percent, entering the positive territory for the first time since 2019.

The rise in German yields came in the wake of investors reconsidering an earlier rate hike by the ECB, tracking the Fed's move.

Investors are pricing in a 10 basis-point rate hike by September, followed by another one in December.

European stocks recovered from an early slide to trade on a flat note, as luxury stocks surged after upbeat trading updates from Richemont and Burberry.

The euro rose to 1.1350 against the greenback and 1.0393 against the franc, up from its prior low of 1.1319 and near a 2-week low of 1.0375, respectively. The currency may possibly challenge resistance around 1.16 against the greenback and 1.05 against the franc.

The euro rebounded to 129.98 against the yen, from Asian session's more than a 3-week low of 129.39. If the euro rises again, it may test resistance around the 131.5 level.

In contrast, the euro fell to 0.8314 against the pound, a level unseen since February 2020. On the downside, 0.82 is seen as the next likely support for the currency.

The euro weakened to 6-day lows of 1.6676 against the kiwi and 1.5703 against the aussie, off its early highs of 1.6741 and 1.5787, respectively. Against the loonie, it hovered at nearly a 5-year low of 1.4139, compared to yesterday's close of 1.4165. The euro is poised to find support around 1.64 against the kiwi, 1.54 against the aussie and 1.40 against the loonie.

Looking ahead, Bank of England Governor Andrew Bailey will testify along with Deputy Governor Jon Cunliffe on the Financial Stability Report before the Treasury Select Committee in London at 9:15 am ET.

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