The euro hit four month highs on Wednesday against the U.S. dollar, as Europe's growth prospects improved after Germany's proposed 500-billion euro ($531 billion) infrastructure fund, potentially offsetting global trade tensions.

The euro surged to a nearly four-month high on Wednesday after Germanys conservatives and Social Democrats agreed on a historic debt overhaul, boosting market confidence. The common currency hit $1.0637 before easing

The prospective partners in Germany’s next government say they will seek to loosen the nation’s rules on running up debt to allow for higher defense spending