The dollar stabilized on Thursday Following two consecutive volatile days in which there were significant drops and recoveries as traders interpreted new economic data as suggesting the Federal Reserve may delay raising interest rates.

Better-than-expected retail sales data and additional indications of a slowing of inflation supported the dollar and contributed to the narrative of an economic "soft landing," which would give the Fed more time before reducing rates.

Although traders are still confident that rates won't rise, they have decreased the likelihood of a first reduction by March from better than 1-in-3 to less than 1-in-4 as of one day ago.

A robust increase in employment did not help Australia's currency, as traders focused on the fact that increases came primarily from part-time labor, even as the unemployment rate increased.

The dollar index that gauges the greenback versus its major pairs ticked up by 0.14% to 104.47. It added 0.31% on Wednesday, post a 1.51% slump the earlier day.

EUR/USD advanced by $1.08395.

GBP/USD added $1.2395.

USD/JPY steadied at 151.33, following a Wednesday comeback from its worst losses versus key competitors in a year.