Euro rises on higher eurozone inflation

The euro advanced against the dollar and other major currencies Tuesday following data showing higher inflation in the eurozone.

Official data showed eurozone inflation climbed to 0.3 percent in May, the first rise in five months and an increase that lifted hopes of economic recovery in Europe.

The data came ahead of Wednesday's meeting of the European Central Bank and a subsequent press conference with ECB Chief Mario Draghi.

"While the ECB has never formally said it would do so, those in the camp of the ECB tapering its bond buying program before its projected September 2016 end date were just given significant reinforcement," said Christopher Vecchio, analyst at DailyFX.

Fawad Razaqzada, an analyst at Forex.com, said the pricing data, along with solid labor reports from Germany and Spain, are evidence the ECB bond-buying program is working.

"However it is still too early for the ECB to turn hawkish, although any suggestions on Wednesday by Mario Draghi about an earlier-than-planned end of QE could see the euro surge even higher," Razaqzada said.

The forex market is also watching talks between Greece and creditors ahead of a Friday deadline for Greece to repay more than 300 million euros ($328 million) to the International Monetary Fund.