The euro rose on Friday after German parties agreed on a fiscal deal that could boost defence spending and revive growth in Europe's largest economy. The dollar weakened against the euro but rose against the Swiss franc and the yen,

German shares rose on the news, with the blue chip Dax index over 2% higher on the day, while mid and small-cap stocks rose over 3%. The euro also strengthened and was last up 0.5% at $1.0904,, while Germany's 10-year bond yield, rose 7 basis points to 2.93%.

German lawmakers have reached an agreement to exempt some defense spending from the nation’s tight rules on running up debt.