Most Asian currencies edged lower on Thursday as the U.S. dollar was slightly stronger, supported by easing geopolitical and trade tensions over Greenland, while the Australian dollar jumped to a 15-month high after strong domestic jobs data.
The US Dollar Index, which measures the greenback against a basket of major currencies, traded marginally higher after gaining 0.1% overnight.
US Dollar Index Futures traded flat as of 05:48 GMT.
Get premium forex insights, analyst research with InvestingPro Trump eases tariff tensions over Greenland U.S. President Donald Trump stepped back on Wednesday from earlier threats to impose tariffs linked to his push to acquire Greenland and ruled out the use of force.
Trump said a framework deal could be within reach to resolve the dispute in a way that would satisfy all parties, easing investor concerns that had previously driven safe-haven demand.
That shift helped stabilise broader markets and reduced pressure on the greenback, which firmed against a basket of currencies. Asian units broadly softened as traders trimmed positions amid the stronger dollar and reassessed regional policy outlooks.
Japanese yen weak on Takaichi’s snap election The Japanese yen’s USD/JPY pair gained 0.3%, remaining under pressure near 18-month lows, as investors focused on Prime Minister Sanae Takaichi’s calls for a snap election and indications of expansionary fiscal measures.
"Her proposal to suspend the 8% consumption tax on food and non-alcoholic beverages for two years has heightened market worries about larger deficit financing," MUFG analysts said in a note.
They said that despite Japan’s commitment to fiscal discipline, FX intervention, the yen is likely to stay under downward pressure amid election uncertainty and a steeper JGB curve.
Elsewhere in Asia, the South Korean won’s USD/KRW pair rose 0.3%, while the Singapore dollar’s USD/SGD traded flat.
The Indian rupee’s USD/INR pair traded flat at 91.58 rupees, just below record highs of 91.63 rupees touched in the previous session.
In China, the yuan’s onshore pair USD/CNY was little changed.
Aussie dollar hits 15-mth high on strong jobs data The Australian dollar outperformed regional peers, with the AUD/USD pair jumping 0.8% to a 15-month high after data showed Australia’s labour market grew far more strongly than expected in December.
Employment rose by 65,200 jobs, sharply above market forecasts, while the unemployment rate fell to 4.1%, defying expectations of a slight increase.
The robust figures reinforced market bets that the Reserve Bank of Australia could raise interest rates as soon as its February meeting, with traders increasing the probability of a near-term hike.
