European shares fell on Thursday, hit by a slump on Wall Street after weak U.S. retail sales data and led down by heavily-weighted oil stocks such as BP after oil prices fell close to $50 a barrel.
But the dollar jumped against both the yen and the euro as currency traders latched on to the greenback's growing yield premium and brushed off fresh concerns over the robustness of the U.S. economy and its yawning trade gap.
The FTSEurofirst300 index of leading European shares lost 0.2 percent.
The pan-European FTSEurofirst 300 is within 1-2 percent of multiyear highs after a 2-year rally, but has traded sideways for more than a month as interest rate fears offset support from underlying valuations.
On the foreign exchange market the euro changed hands for around $1.2840 and bought around 107.90 yen as traders factored in more U.S. interest rate rises while discounting the potential for any in the flagging euro zone and Japanese economies soon.
Underlying Europe's woes, the EU statistics agency reported that the euro zone economy expanded just 0.2 percent in the fourth quarter of last year from the third quarter for an annual growth rate of 1.6 percent, keeping an earlier estimate unchanged.
U.S. crude oil futures fell to a seven-week low near $50.06 before steadying around $50.36 after U.S. inventories data on Wednesday showed a ninth straight weekly rise in crude stocks.
Oil prices have lost nearly 14 percent from last week's record high above $58 a barrel, on fears of a rise in global supplies.
Comparable 10-year euro zone government bonds yielded 3.52 percent, just off a two-month low.
The firmer dollar hit gold prices which eased to $428 an ounce.