The US dollar edged lower on improved market sentiment as geopolitical tensions over Greenland eased.
President Donald Trump withdrew his tariff threats against allies and ruled out military action, helping to stabilize currency markets.
Analysts said the recent moves reflected more hedging activity than a massive outflow of US assets.
The Australian dollar outperformed other major currencies after strong jobs data boosted expectations of interest rate hikes.
The Japanese yen remained weak amid political uncertainty and concerns over market intervention.
Market focus now shifts to US PCE inflation data, which is expected to be the main catalyst for the currency's next move.
