EUR/USD hit 1.3158 during U.S. morning trade, the pair's highest since February 28; the pair subsequently consolidated at 1.3113, gaining 0.59%.
The pair was likely to find support at 1.3021, the session low and resistance at 1.3245, the high of February 22.
The euro weakened earlier, after data showed that the German ZEW economic sentiment index dropped to 36.3 in April, from a reading of 48.5 the previous month, compared to expectations for a fall to 42.0.
The euro zone ZEW economic sentiment index declined to 24.9 this month, from 33.4, compared to expectations for a reading of 31.5.
A separate report showed that euro zone consumer price inflation remained unchanged at an annualized rate of 1.7% in March, in line with expectations.
Core CPI in the single currency bloc rose to an annualized rate of 1.5% last month, from 1.3% in February, beating expectations for a rise to 1.4%.
In the U.S., the Census Bureau said building permits rose by 0.902 million in March, less than the expected 0.940 million increase, after a 0.968 million rise the previous month.
The report added that housing starts in the U.S. rose by 1.036 million units last month, beating expectations for an increase of 0.930 million, after a 0.986 million rise in February.
Separately, official data showed that core CPI in the U.S. rose 0.1% in March, disappointing expectations for a 0.2% increase, after a 0.2% rise the previous month.
CPI, including food and energy, fell 0.2% last month after a 0.7% rise in February, compared to expectations for a 0.1% gain.
In addition, the Federal Reserve said industrial production in the U.S. rose 0.4% in March, beating expectations for a 0.2% gain, after a 1.1% increase the previous month.
The euro was also higher against the pound with EUR/GBP advancing 0.57%, to hit 0.8578.
Also Tuesday, the International Monetary Fund cut its 2013 forecast for global growth to 3.3%, down from its January projection of 3.5%. It also trimmed its 2014 forecast to 4.0% from 4.1%.