The U.S. dollar held on to overnight gains against major peers on Thursday after President Donald Trump withdrew a threat to impose tariffs on a number of European NATO nations, trumpeting the framework of a deal with NATO over control of Greenland, Reuters reported.
The Australian dollar rose to a 15-month high, buoyed both by improvement in risk sentiment and by data showing an unexpected decline in the jobless rate.
The yen remained under pressure, matching last week's record low versus the euro, after Japanese Prime Minister Sanae Takaichi this week called a snap election and pledged measures to loosen fiscal policy.
The Bank of Japan kicks off a two-day policy meeting on Thursday, but market participants expect no change as the central bank raised its policy interest rate at its previous meeting last month.
Trump's threat to levy tariffs on allied nations opposed to his ambition to control Greenland spooked markets and triggered a broad selloff of U.S. assets, but his comment in Davos on Wednesday that he had ruled out military action offered relief.
The U.S. president said he had reached a framework for a deal with NATO over Greenland, but he did not offer any details in a post to his Truth Social platform about what that would entail. As a result, though, he said he would not impose tariffs.
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