The euro was higher against its key counterparts in the European session on Thursday, as European shares rose following the Fed's pledge to keep rates low to spur the economy and job growth.

Powell told the Economic Club of New York that the U.S. is still "very far" from a strong labor market and more needs to be done.

Investors bet on additional fiscal stimulus after tame U.S. inflation data released overnight.

U.S. President Joe Biden held a telephonic conversation with Chinese President Xi Jinping on Wednesday night and they exchanged views on the bilateral relationship and major international and regional issues.

Xi warned that confrontation would be "a disaster" and called to re-establish the means to avoid misjudgments.

Data from Destatis showed that German wholesale prices remained stable in January.

The wholesale price index remained unchanged year-on-year in January, after a 1.2 percent decrease in December.

The euro reversed from its early lows of 1.2114 against the greenback and 126.69 against the yen, gaining to 1.2136 and 127.07, respectively. If the euro rises further, 1.24 and 129.00 are likely seen as its next resistance levels against the greenback and the yen, respectively.

The euro edged higher to 0.8776 against the pound and 1.0800 against the franc, after falling to 0.8753 and a 10-day low of 1.0784, respectively in prior deals. The euro may challenge resistance around 0.90 against the pound and 1.10 against the franc.

In contrast, the European currency was down against the loonie, at a 2-day low of 1.5369. Next key support for the euro is seen around the 1.50 level.

The single currency was steady against the kiwi, after reaching as low as 1.6767 in late Asian trading. The pair finished yesterday's deals at 1.6788.

After having fallen to a 2-day low of 1.5644 at 3:00 am ET, the euro held steady against the aussie. This followed a 3-day high of 1.5708 set at 7:30 pm ET. At yesterday's close, the pair was worth 1.5692.

Looking ahead, the U.S. weekly jobless claims for the week ended February 6 will be featured in the New York session.