The West German July business climate index rose to 93.6 above consensus expectations of 93.5 and from 92.9 in June. The euro's gains in the wake of the report were more pronounced as traders had begun to price in a weaker number in recent days, analysts said.

"The reaction in the euro is due to the fact that the rumours were for a weaker figure than the consensus," said David Coleman, chief economist at CIBC World Markets in London.