A strong showing in the US' nonfarm payrolls report has increased hopes of the Federal Reserve hiking rates later this month.
The monthly report showed the US economy added 211,000 jobs last month, with unemployment sticking at five per cent. The dollar's reaction to the news was muted, having spiked above $1.09 against the euro, it settled back around $1.0878.
The figure follows October's report, which smashed expectations, with 271,000 jobs, a huge rise on the 180,000 expected. That was revised even higher today, to 298,000.
November's strong figure boosted hopes Janet Yellen will announce plans to raise interest rates for the first time since 2006 after a meeting of the Federal Open Markets Committee (FOMC) next week.
If the FOMC does vote to raise rates next week, it will signal an unprecedented divergence between European and US monetary policy.
"Overall the number will be seen as positive for the US markets, despite the fact that it means that we are a further step closer to the rate hike," said James Hughes, chief market analyst at GKFX.
"EURUSD, that had been so disappointed by yesterday’s ECB statement, has rallied on the back of the news briefly extending yesterday’s gains before falling back lower. The major indices were also briefly volatile but overall unchanged.
"Overall this confirms what Janet Yellen has called and keeps the Fed well on course to raise interest rates on 16 December."
Meanwhile, yesterday European Central Bank (ECB) chief Mario Draghi had been expected to unleash another economic "bazooka" with further monetary easing measures. However, Draghi's announcements - to cut deposit rates to minus 0.3 per cent and extend the ECB's asset buying programme into 2017 - disappointed investors, causing European markets to fall.