Investing.com - The euro backed off two-month highs against the dollar on Thursday, slipping to session lows as a selloff in German government debt eased and data showed that U.S. initial jobless claims remained close to 15-year lows last week.
EUR/USD was down 0.67% to 1.1271, off earlier highs of 1.1392, the most since late February.
The euro weakened as German 10-year bund yields eased back to trade almost unchanged for the day after surging to their highest level since mid-December 2014 earlier.
German bund yields act as benchmarks for European financial markets and higher yields push the euro higher against the dollar.
The dollar found support after the Labor Department reported that the number of Americans filing new claims for jobless benefits last week rose 3,000 to 265,000.
Claims for the previous week were unrevised at 262,000, the lowest level since April 2000. Jobless claims have now held below the 300,000 threshold which indicated a strengthening labor market for nine straight weeks.
The dollar had weakened across the board after data on Wednesday showed that the U.S. private sector added just 169,000 jobs in April, far fewer than the 200,000 expected by economists.
The downbeat data fuelled fears that the government employment report, due out on Friday, would also fall short of forecasts.
Recent economic reports have indicated that the economy has slowed since the start of the year prompting many investors to push back expectations on the timing of an initial rate hike by the Federal Reserve.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.73% to 94.87, recovering from the two-month lows of 93.96 set on Wednesday.
The euro was also lower against sterling, with EUR/GBP at 0.7409, off highs of 0.7482.
But the pound was lower against the dollar, with GBP/USD down 0.5% to 1.5169 as investors awaited the outcome of U.K. general elections, which were widely expected to result in a hung parliament and an unstable coalition government.
Elsewhere, USD/JPY was steady at 119.42, while EUR/JPY was down 0.91% to 134.29.