The U.S. dollar gained ground Thursday after President Donald Trump stepped back from threats to impose tariffs on European nations over Greenland. The Dollar Index rose 0.1% to 98.630, recovering from earlier losses.

Investors welcomed the shift in tone, which signaled reduced geopolitical risk. Markets had reacted negatively to earlier rhetoric, with the dollar falling sharply midweek. Analysts noted that while details of the Greenland framework deal remain sparse, the immediate threat of trade conflict has eased.

Looking ahead, focus shifts to key U.S. economic data, including inflation figures and GDP growth, ahead of the Federal Reserve’s January meeting. The euro drifted lower against the dollar, while the yen remained under pressure amid political uncertainty in Japan. In contrast, the Australian dollar surged after stronger-than-expected jobs data fueled expectations of rate hikes.