A better-than-expected German business sentiment survey drove the euro higher against major currencies on Friday and drained demand for bonds.
European stocks were down slightly. Japanese shares ended at a four-week high.
The major market move in Europe was Germany's closely watched Ifo business climate index, which unexpectedly rose to 96.2 in December, its highest level since April.
Analysts said the data suggested that economic recovery in Europe's largest economy was still underway and that damage to businesses from the recent strength of the euro was being offset by lower oil prices.
"If the oil price and the euro develop a little favourably, we could have an acceleration of growth at the start of next year," said Matthias Rubisch of Commerzbank.
The euro rose against major currencies after the report. It hit a day's high of $1.3300 against the dollar from $1.3270 beforehand. Later, it was at $1.3288.
The dollar was also nearly a half a percent lower against the Japanese yen at 104.28 yen.