The USD currency recorded its lowest fall in two weeks after the US threat over Greenland triggered a massive sell-off of US assets, especially currencies, stocks and Treasury bonds.
At 10 am, the US Dollar Index (DXY) was at 98.502 points, down 0.06% since it opened in early trading Wednesday in the Asian session.
On Monday, US President Donald Trump’s new tariff threat against European allies over the Greenland issue reignited the “Sell America” trading sentiment, which had previously emerged after the US tariff announcement in April.
Investors were seen reducing their holdings of dollar-based assets due to concerns over prolonged uncertainty, increasingly strained alliance relations, erosion of confidence in US leadership, the risk of retaliation, and the acceleration of the global de-dollarization trend.
While there is expectation that the US administration may soften the threat in the near term, as has happened before, efforts to secure Greenland remain seen as an important national security objective for the current administration.
Investors' attention is now on key economic data this week including the third-quarter US Gross Domestic Product (GDP) update, the January Purchasing Managers' Index (PMI) reading and the Personal Consumption Expenditures (PCE) report, which is the Federal Reserve's (Fed) preferred measure of inflation.
