Euro falls against dollar again on choppy trade

An image of Euro banknotes being counted.
Leonhard Foeger | Reuters
An image of Euro banknotes being counted.

The euro on Thursday traded back-and-forth against the U.S. dollar as traders pocketed profits from the euro's biggest two-day gain in six years and German Bund yields slipped from multi-month highs.

Traders trimmed euro positions as a precaution ahead of the U.S. Labor Department's monthly non-farm payrolls report due Friday.

"Short-term guys who were lucky enough to buy the euro early in the week have a major U.S. economic release to look forward to," said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago. "They're not going to hold their positions," he said.

The euro last traded down 0.2 percent against the dollar at $1.1238, as German 10-year Bund yields, fell to 0.83 percent from a session peak of about 1 percent, their highest since late September 2014.

The rise in Bund yields from a record low of 0.049 percent on April 17 drove investment flows into the euro, forcing traders who had bet against or "shorted" the euro to cover their bets, analysts have said.

Read MoreThe euro is still a sell: Analysts

Friday's U.S. jobs data, which economists polled by Reuters expect will show U.S. employers added 225,000 jobs in May, could boost expectations that the Federal Reserve will hike rates in September, thereby boosting the dollar.

"If the U.S. jobs number comes in in the low-to-mid 200,000s, then the September liftoff is back in play and it should help the dollar bounce back from its recent lows," said Win Thin, currency strategist at Brown Brothers Harriman in New York.

The dollar was last flat against the yen at 124.35 yen. The dollar was last flat against the Swiss franc at 0.9348 franc.

The dollar index, which measures the greenback against a basket of six major currencies, was last flat at 95.49. The dollar's modest losses against the sterling contributed to the index's weakness.