Renewed worries about US-China trade tension rekindled a dumping of US stocks earlier, though stocks reversed course in late trade, with the Dow and the S&P 500 turning positive.

Reuters reported the Trump administration was considering an executive order in the new year to declare a national emergency that would bar US companies from using Huawei Technologies and ZTE products.

Commodity-linked currencies sagged as oil prices weakened near 18-month lows on excess supply.

"Everyone is getting leery with this kind of market volatility this time of the year," said Joseph Trevisani, senior analyst at FXStreet in New York.

The yen was up !RIC {JPY=EBS} is invalid percent against the dollar at !RIC {JPY=EBS} is invalid yen. This followed an almost 1 percent loss, its biggest percentage fall since April 23.

The Swiss franc climbed !RIC {CHF=EBS} is invalid percent to !RIC {CHF=EBS} is invalid franc per dollar, reversing most of its 1.1 percent drop on Wednesday.

More broadly, the dollar index, which tracks the greenback against six major currencies, was 0.51 percent lower at 96.556.

Earlier on Thursday, a measure of US consumer confidence posted its sharpest decline in more than three years in December.

"The dollar has had a great rally this year but it doesn't have much more in it to go further, especially if you are seeing the Fed slow down in rates," said Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California.

The Federal Reserve last week raised interest rates for the fourth time this year, but rate futures show traders are skeptical the US central bank will raise rates at all next year.

In addition to some softening of US business activities, data on Thursday showed earnings at China's industrial firms in November dropped for the first time in nearly three years in a sign of rising risks to the world's second-largest economy.

However, the Chinese yuan strengthened against the dollar in offshore trading at ! is invalid yuan, up ! is invalid percent.

The Australian dollar, seen as a proxy for China's growth because of Australia's export-reliant economy, fell 0.62 percent.

With Brent oil prices falling over 4 percent on Thursday, the greenback rose against commodity-linked currencies. The dollar was up 0.34 percent against its Canadian counterpart, while the New Zealand dollar fell 0.52 percent.