The U.S. dollar recovered from early losses on Thursday after fairly encouraging economic data dashed hopes of any aggressive interest rate cut by the Federal Reserve next week, but gave up gains as the day progressed with investors awaiting non-farm payroll data due on Friday, and the presidential election next week.

Eurozone inflation accelerated more than expected in October on food and energy prices but it remained within the target of the European Central Bank, bolstering the case for a gradual monetary policy easing. Another official data showed that the euro area unemployment rate remained unchanged at a record low in September.

MNI Indicators released a report on Thursday showing its reading on Chicago-area business activity unexpectedly tumbled to a five-month low in October. The report said MNI Indicators' Chicago business barometer slumped to 41.6 in October from 46.6 in September, with a reading below 50 indicating contraction. Economists had expected the business barometer to inch up to 47.0.

The Commerce Department on Thursday released its report on U.S. personal income and spending in the month of September, which includes the Federal Reserve's preferred readings on consumer price inflation. The report said the personal consumption expenditures (PCE) price index rose by 0.2 percent in September after inching up by 0.1 percent in August. The modest increase matched estimates.

With the more closely watched monthly jobs report looming, the Labor Department released a report on Thursday showing an unexpected decline by first-time claims for U.S. unemployment benefits in the week ended October 26th. The report said initial jobless claims fell to 216,000, a decrease of 12,000 from the previous week's revised level of 228,000.

France's consumer price inflation rose at a slower-than-expected pace in October, provisional estimate from the statistical office INSEE showed on Thursday. Consumer price inflation rose slightly to 1.2 percent in October from 1.1 percent in September. The rate was forecast to climb to 1.9 percent.

The Japanese yen strengthened against other major currencies in the Asian session on Thursday, after the Bank of Japan left its key interest rate unchanged as widely expected on Thursday and retained a cautious approach as political instability and looming U.S. presidential election added concerns about economic outlook.

Inflation and unemployment from the euro area and retail sales from Germany are the top economic news due on Thursday. At 3.00 am ET, Destatis is scheduled to issue Germany's retail sales and import prices for September. Economists forecast retail sales to fall 0.7 percent on month in September.

China's manufacturing activity expanded for the first time in six months in October, underpinned by strong domestic demand, official survey data revealed Thursday. The official manufacturing Purchasing Managers' Index rose to 50.1 in October from 49.8 in September, survey data from the National Bureau of Statistics showed. The score was seen unchanged at 49.8.

The Bank of Japan left its key interest rate unchanged as widely expected on Thursday and retained a cautious approach as political instability and looming US presidential election added concerns about economic outlook. In a unanimous vote, the Policy Board decided to maintain the uncollateralized overnight call rate to remain at around 0.25 percent. This was the highest since late 2008.

The U.S. dollar shed ground on Wednesday after data showed an unexpected slowdown in the nation's GDP growth. Investors also digested strong private sector employment data and looked ahead to the crucial non-farm payroll data due later in the week.

Consumer price inflation in Germany increased more than expected to its highest level in three months in October and the core figure moved closer to 3 percent, damping expectations for a bigger size interest rate cut from the European Central Bank.

Pending home sales in the U.S. spiked by much more than expected in the month of September, according to a report released by the National Association of Realtors on Wednesday. NAR said its pending home sales index soared by 7.4 percent to 75.8 in September after climbing by 0.6 percent to 70.6 in August. Economists had expected pending home sales to jump by 1.1 percent.

A report released by the Commerce Department on Wednesday showed U.S. economic growth unexpectedly slowed in the third quarter. The Commerce Department said gross domestic product shot up by 2.8 percent in the third quarter after surging by 3.0 percent in the second quarter. Economists had expected another 3.0 percent jump.

The Eurozone economic growth improved unexpectedly in the third quarter, easing fears of an imminent recession as Germany, France and Spain registered better-than-expected growth. Gross domestic product increased 0.4 percent on a quarterly basis, the preliminary flash estimate from Eurostat showed Wednesday. GDP was expected to log 0.2 percent growth, the same rate as seen in the second quarter.

Payroll processor ADP released a report on Wednesday showing private sector employment in the U.S. shot up by much more than anticipated in the month of October. ADP said private sector employment surged by 233,000 jobs in October after jumping by an upwardly revised 159,000 jobs in September. Economists had expected private sector employment to climb by 115,000 jobs.

The German economy avoided a technical recession in the third quarter, thanks to household and government consumption, preliminary estimate from Destatis showed Wednesday. Gross domestic product grew 0.2 percent from a quarter ago, confounding expectations for a contraction of 0.1 percent. However, the statistical office downwardly revised the fall for the second quarter to 0.3 percent from 0.1 p

The British pound weakened against other major currencies in the European session on Wednesday, as traders await the U.K. budget declaration, where the Labour administration is anticipated to increase taxes and expenditure.

The euro strengthened against other major currencies in the European session on Wednesday, after the German economy expanded unexpected in the third quarter, underpinned by household and government consumption.

The Spanish economy logged a faster-than-expected growth in the third quarter on domestic demand, advance estimates from the statistical office INE showed on Wednesday.

Gross domestic product grew 0.8 percent on a sequential basis, the same rate of growth as seen in the second quarter. Growth was forecast to ease to 0.6 percent.

The Spanish economy logged a faster-than-expected growth in the third quarter on domestic demand, advance estimates from the statistical office INE showed on Wednesday.

Gross domestic product grew 0.8 percent on a sequential basis, the same rate of growth as seen in the second quarter. Growth was forecast to ease to 0.6 percent.

The Commodity-linked currencies such as Australia, the New Zealand and the Canadian dollars extended its weakness against major currencies in the Asian session on Wednesday amid risk aversion, as traders are cautious and reluctant to take positions ahead of the next week's U.S. presidential election and the U.S. Fed's monetary policy decision. Concern about the tension in the Middle East is also weighing on the markets.

France's economic growth doubled in the third quarter as the Paris Olympic and Paralympic Games boosted consumption, official data revealed Wednesday. Gross domestic product posted a quarterly growth of 0.4 percent after expanding 0.2 percent in the second quarter, first estimate from the statistical office INSEE showed. This was also better than economists' forecast of 0.3 percent.

Preliminary GDP estimates from the euro area and other European economies and budget announcement from the UK are due on Wednesday. At 2.30 am ET, France's statistical office INSEE publishes flash GDP and consumer spending figures. The second largest euro area economy is forecast to grow 0.3 percent in the third quarter after expanding 0.2 percent in the preceding period.

The U.S. dollar moved higher in the New York session on Tuesday but gave up gains and struggled for direction with investors digesting a mixed batch of economic data, and looked ahead for more for clues on the Federal Reserve's monetary policy move next week.