The euro weakened on May 31 against the U.S. dollar in a volatile session that was punctuated by concerns over the banking sector of Spain and disappointing U.S. economic data that at one point sent the euro to a fresh low of 23 months. The single currency also hit an 11-1/2-year low against the rallying Japanese yen.

Spanish bond yields remained near record highs on concerns that Spain would eventually have to ask for a bailout.

"The market took the euro up 35 pips on that report, but it didn't last long and just as quickly as it rose it came right back down," said Joe DeGeronimo, chief dealer at SMBC in New York.

The euro fell to 96.48 yen, its worst level against the Yen since December 2000 and has since settled down to trade off 0.02 percent at $1.2367.

U.S. May nonfarm payrolls were expected by economists polled by Reuters to have risen by 150,000 jobs, up from 115,000 in April.

"I think the fear is for a much weaker number. If we get a number below 100,000, that would probably sustain the negative momentum," said Vassili Serebriakov, currency strategist at Wells Fargo in New York.

"I'm not sure if it would necessarily accelerate it. But a number below 100,000 would be seen as the most significant sign of the U.S. economy slowing."