EUR/USD tumbles as Yellen remarks boost dollar

In the rest of the energy market, wholesale gasoline fell 5.4 cents to $1.392 a gallon in New York, heating oil fell 6.3 cents to $1.504 a gallon and natural gas rose 0.9 cents to $2.262 per 1,000 cubic feet.

Currency analysts and traders say many speculative and longer-term players have weighed in this week behind another run higher for the dollar, after a stuttering performance over the past six months.

By tweaking its language and stressing on the next meeting FED has successfully been able to align market expectation to a possible rate hike in its December monetary policy meeting, also keeping the door open to a no-move, without disrupting the market much.

Meanwhile, the British pound sold off Thursday after the Bank of England signaled that it wouldn't raise interest rates in the United Kingdom soon.

Yellen's comments came in response to questions during an appearance before the House Financial Services Committee on Wednesday.

United States nonfarm payrolls, which are closely watched by the Fed, are expected to show the world's biggest economy added 180,000 jobs last month, while the unemployment rate held at 5.1 percent. France's CAC 40 was up 0.2 percent at 4,958.16. But she mentioned the more important focus should be on the pace of the rate hikes after the Fed decides to move.

The greenback fell to a session low against the euro on Thursday after unexpectedly weak data on USA jobless claims but largely rebounded and was last up 0.02 percent at $1.0860.

Gold futures for December delivery slid 0.2 percent to settle at $1,104.20 an ounce at 2:00 p.m. on the Comex in New York, after falling to $1,103.60, the lowest since September 16.

Economists anticipate a few improvement in other labor market measures that Fed officials are eyeing as they contemplate raising rates for the first time since 2006.

These numbers are considerably lower than was normal in past decades because the USA population is becoming increasingly elderly.

If economic data continues to point to growth and firmer prices, a December rate hike would be a "live possibility", she said.

"Further downside potential remains should the NFP number rise, bolstering speculation for the Fed to raise rates in December", FastMarkets analyst Tom Moore said.

"Today may see the BoE sharpen up its hawkishness too with a potential 7-2 vote and the Inflation Report and related minutes underlining the need to normalise interest rates over the course of next year", Morgan Stanley said in a note, adding these factors could send the currency higher.