In early New York trade, the euro hit a high of $1.3692, according to Reuters data, far above Thursday's one-month low of $1.3484. It last traded at $1.3684, up 0.6 percent.

Against the yen, the euro hit a high of 105.84 and last traded at 105.82, up 0.2 percent.

U.S. stocks opened sharply higher.

The euro held onto gains after Italy's Senate approved a new budget law on Friday, clearing the way for approval of the package in the lower house on Saturday and the formation of an emergency government to replace that of Prime Minister Silvio Berlusconi.