Dollar's Stability Amid NATO Deal Hints and Yen's Struggles

The U.S. dollar maintained overnight gains post-Trump's tariff withdrawal against European NATO nations. The Australian dollar soared to a 15-month high, while the yen suffered record lows. Market attention is now on inflation data and central bank moves, with potential impacts on global currencies and fiscal policies.

In a surprising shift, the U.S. dollar remained resilient after former President Donald Trump retracted tariff threats against key European NATO countries. This development came as Trump announced a non-specific framework deal concerning Greenland's control, assuaging immediate market concerns over potential U.S. military action.

In stark contrast, the Australian dollar achieved a 15-month high, bolstered by improved economic sentiment and a notable drop in unemployment figures. With central banks' interest rate strategies under scrutiny, the prospects of a rate hike have risen significantly.

Meanwhile, the Japanese yen faced pressure, hitting a new low against the euro amid a political shake-up following Prime Minister Sanae Takaichi's announcement of a snap election. As eyes turn to upcoming economic data releases and central bank meetings, the global currency landscape continues to experience volatility.

(With inputs from agencies.)