Global Currencies Shift Amid Trump's Tariff U-Turn and Economic Data

The safe-haven dollar slid as risk-sensitive currencies surged following President Trump's retraction of tariff threats and the calming of markets. U.S. consumer spending grew solidly, keeping the economy on track. The Australian dollar hit a high, while the yen remained under pressure before Japan's fiscal policy announcements.

In a significant market shift, the dollar faltered on Thursday as risk-sensitive currencies like the euro and sterling gained strength. This change came after President Donald Trump retracted his tariff threats and dismissed the notion of forcibly acquiring Greenland, offering a respite to jittery markets.

U.S. consumer spending, which accounts for over two-thirds of economic activity, showed robust growth in October and November. This increase likely keeps the economy poised for continued expansion, according to data released by the Commerce Department's Bureau of Economic Analysis.

Amid these developments, the Australian dollar soared to a 15-month high, driven by unexpectedly positive employment data. Meanwhile, the Japanese yen remained under pressure, with analysts predicting a hawkish tilt from the Bank of Japan to stabilize the currency.

(With inputs from agencies.)