European stocks erased early losses to close little changed as positive economic data in the region offset negative sentiment following a slump in Chinese equities. The dollar extended a retreat sparked by Wednesday’s more dovish than expected Federal Reserve minutes.

With U.S. markets closed and most American investors out for the Thanksgiving holiday, the Stoxx Europe 600 struggled for traction amid mixed regional benchmarks and a stronger euro. The common currency headed for a five-week high after data showed the euro-area economy picked up momentum in November and as Germany’s Social Democrat party was said to be open to talks with Chancellor Angela Merkel. Most bonds in the region nudged lower. Sterling headed for its first drop in eight days after a volatile session yesterday following the U.K. budget. Earlier in Asia, Chinese stocks fell sharply after a recent surge that prompted government warnings about runaway prices.The euro-area economy gathered pace in November to stay on track for its best annual performance since the financial crisis, data showed Thursday. Supported by ultra-low interest rates and asset purchases from the European Central Bank, the bloc has seen unemployment drop from a record and is enjoying its most synchronized expansion since before the single currency was founded. Still, minutes from the central bank’s last policy meeting showed ECB policy makers argued against putting an end date to its bond-buying program.

Meanwhile, German politics remains in the spotlight, with Social Democrat leader Martin Schulz ready to start talks with Merkel and prepared to offer her limited support for a fourth term, according to two people familiar with his plan. In the U.S., while the Fed’s meeting minutes showed many policy makers still saw a “near term” rate hike as warranted, several were concerned about soft inflation.

Elsewhere, West Texas oil extended an advance to a two-year high. U.S. crude inventories dropped, adding to optimism OPEC’s output curbs are working.

Stocks in Latin America flagged, led by Chile’s benchmark IPSA index. Chilean stocks are falling after Sebastian Pinera, who has promised to lower corporate tax, performed worse than expected in last weekend’s first-round presidential election.

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