The euro dropped against other major currencies, continuing to give back some of its recent gains against other major currencies. The higher-yielding currency fell as traders looked to unwind riskier positions ahead of the three-day holiday weekend.

The euro slipped to an 11-day low versus the U.S. dollar of 1.3132. The European currency has been losing ground throughout the week.

On the economic front, a report from the Labor Department showed that jobless claims fell to 654,000 from the previous week's revised figure of 674,000. Economists had expected jobless claims to edge down to 660,000 from the 669,000 originally reported for the previous week.

In other economic news, the Commerce Department said that the U.S. trade deficit narrowed to $26.0 billion in February from $36.2 billion in January. Economists had been expecting the trade deficit to come in at $36.0 billion.

The euro hit a monthly low against the British pound, touching 0.8989 with a late-morning slide. The European currency has been trending lower for three weeks.

At the end of two-day rate setting meeting on Thursday, the Monetary Policy Committee of the Bank of England decided to hold the interest rate at 0.5%. The interest rate now stands at the lowest level since the central bank was established in 1694. The BoE maintained the rate after slashing it for six straight months from 5% in September.

The euro was little-changed against the yen, after slipping away from a five-month high versus the Japanese yen yesterday. The pair moved near 132.00, compared to the 135.57 reached earlier this week.

Japan's ruling Liberal Democratic Party has approved fresh stimulus spending of 15.4 trillion yen (US$154 billion) to resuscitate the world's second-biggest economy from its deepest recession since World War II. On the same day, the Bank of Korea held its key interest rate at a record low level for the second straight month.

The European Central Bank said in its monthly bulletin that the world economy, including the euro area, is undergoing a severe downturn. The April bulletin was identical to the introductory statement given by the ECB President Jean-Claude Trichet on April 2, after announcing the Governing Council decision.

Available indicators of inflation expectations over the medium to longer term remain firmly anchored in line with the Governing Council's aim of keeping inflation rates at levels below, but close to, 2% over the medium term, the ECB said.

Germany's Federal Statistical Office said in a final report that the consumer price index, or CPI, rose 0.5% year-on-year in March, slower than the 1% increase in the previous month. This was the lowest inflation since July 1999. Compared with February, the CPI dropped 0.1% in March.

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