Although euro rose to an intra-day high of 1.5142 on Thursday after ECB President Trichet's speech, the single currency then retreated sharply from there after failing to penetrate its 16-month high of 1.5145. The decline accelerated in late New York afternoon on the selloff in equities minutes before markets closed. Earlier, a report showed that U.S. ISM non-manufacturing index shrank unexpectedly to 48.7 in November compared to economists' forecast of 51.3.

The ECB left its main refinancing rate at a record low of 1% and announced that it will conduct the last of its 12-month refinancing operations this month as its starts winding down liquidity injections for banks. Comments from European Central Bank suggested emergency stimulus lending will be withdrawn gradually. ECB's President Trichet said that monetary analysis signalled low inflation pressure over the medium term and latest information still suggested improvement in economic activity for the rest of the year and recovery will continue at gradual pace in 2010, however, he indicated that uncertainty remains high.

The British pound dropped against the dollar and euro on Thursday. U.K. CIPS services PMI came in at 56.60 in November, below economists' forecast of 57.00 and 56.90 in October. The British pound retreated from an intra-day high of 1.6722 and remained under pressure throughout the New York session on the greenback's broad-based rebound against major currencies after Fed Chairman Bernanke said that monetary policy has to look ahead over a longer period of time and it was not monetary policy so much as problems in the mortgage market that led to the housing boom and bust. Eur/gbp rallied to 0.9117.

Data to be released on Friday include Switzerland combined PPI, Canada unemployment rate and Ivey PMI, as well as the closely-watched U.S. non-farm payrolls and unemployment rate.