Dollar Dragged Down by Trump Tariff Drama
The US dollar weakened sharply on Tuesday, dragged down by "Sell America" sentiment after US-European tensions over Greenland escalated. Investors appeared to be reducing their exposure to US assets, fearing that the threat of tariffs and retaliation would prolong market uncertainty.
In the currency market, the dollar index fell around 0.6% to 98.461 (a second day of declines), while the euro rose to $1.1734 and the pound strengthened to $1.346. The euro and pound rose amid an outflow of funds from the dollar, even though UK data still showed a labor market that has not fully recovered.
The yen was under pressure overnight due to Japanese bond volatility, but began to recover as the European session progressed—pushing USD/JPY down to 157.68. Japanese markets are also sensitive after Prime Minister Sanae Takaichi announced a snap election on February 8 and introduced a fiscal easing agenda, which has raised bond investors' concerns about the country's financial condition.
Meanwhile, a flight to safety also boosted the Swiss franc, sending USD/CHF down to 0.7885. Against the offshore yuan, the dollar held relatively steady at 6.952, after the People's Bank of China (PBOC) held the Loan Prime Rate for the eighth consecutive month. Meanwhile, commodity currencies also shone: the Australian dollar rose to $0.675 and the New Zealand dollar to $0.584.
Source: Newsmaker.id
