20.01.202618:04:03UTC+00Dollar Index Extends Decline

On Tuesday, the dollar index continued its downward trajectory, falling below the 98.5 mark and nearly wiping out the gains it had made earlier this year. This decline is largely attributed to the heightened rhetoric from President Trump concerning the acquisition of Greenland. The administration has intensified its stance on taking Greenland from Denmark following Trump's threat to impose 10% tariffs on major European economies starting next month. These tariffs are set to increase to 25% by June if an agreement is not reached. In response, the EU has indicated it might retaliate with tariffs amounting to $93 on American goods. These developments have rekindled market hesitancy toward significant US assets, as investors reduce their exposure to political and economic turbulence, exemplified by Danish pension funds announcing plans to divest from US Treasury securities. This pressure on the dollar index has persisted even amidst a significant depreciation of the yen, which declined following PM Takaichi's proposition to cut taxes on food if her party succeeds in next month's snap elections.