The euro leveled off against the dollar, pausing after a 10-day rally from multi-month lows set earlier in October. Traders were waiting for more news out of Europe, where bold steps have finally been taken to contain the region's simmering sovereign debt problems.

Slovakian lawmakers are poised to ratify the euro zone's EFSF rescue fund, and European Commission president Jose Manuel Barroso has outlined a plan to buffer the fragile banking system.

Today, Barroso said that austerity cutbacks are not the right solution for Europe's economic woes, but sound public finances are an essential part of sustainable growth.

In its monthly bulletin, the European Central Bank said that euro area's economic outlook remains subject to particularly high uncertainty and intensified downside risks.

Disappointing Chinese export data raised concerns about the global economy, increasing risk aversion. Growth in exports eased to a seven-month low reflecting slackening global demand and dwindling confidence levels amid the debt crisis in Europe.

The euro eased to $1.3740 versus the dollar, after touching a 4-week high above $1.38 in the previous session.

The single currency also pulled back versus the yen, slipping to Y105.50 from a monthly high of Y107.04.

In economic news from the U.S., new unemployment claims ticked down slightly in the week ended October 8th, according to figures released Thursday by the Labor Department.

On a seasonally adjusted basis, the Labor Department reported that 404,000 Americans filed new claims for unemployment insurance for the week. The number of new claims is slightly lower than the revised figures for the previous week, which showed 405,000 new claims, up from the 401,000 initially reported.

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