"Now that yields are coming back, the euro is giving up some of its gains," said Richard Franulovich, senior currency strategist at Westpac in New York, in reference to bund yields slipping from their highs.
The euro had built on recent gains against the dollar and risen to a 10-1/2 week high of $1.13920 earlier in the session.
The dollar's recovery against the euro was also helped by U.S. Labor Department data on Thursday showing jobless claims stayed near a 15-year low last week, which boosted optimism that Friday's U.S. nonfarm payrolls report for April could show strength.
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The reading is closely watched since strength in the labor market could lead the Federal Reserve to hike rates sooner.
Economists expect U.S. employers to have added 224,000 jobs last month, according to a Reuters poll. That would mark an increase of about 100,000 from the previous month.
"The initial jobless claims got people a bit more optimistic about the outlook for the payrolls report," said Mark McCormick, currency strategist at Credit Agricole in New York.
"People are buying dollars back or at least closing out positions in foreign currencies against the dollar ahead of payrolls," he said.
Sterling rose broadly as Britons headed to vote on Thursday in the most unpredictable election in decades.
The euro was last down 0.68 percent against the dollar at $1.1269. The dollar was last up 0.61 percent against the Swiss franc at 0.9217 franc. The dollar was last up 0.343 percent against the Japanese yen at 119.81 yen.
The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.6 percent at 94.65.