Dollar Hits Two-Week Low as Tariff Threats Stoke | Money News

(Bloomberg) — The greenback fell to its lowest stage in two weeks and currency hedging prices climbed as President Donald Trump confirmed no indicators of backing down in his marketing campaign to wrest control of Greenland from Denmark and threatened new tariffs on France.

The Bloomberg Dollar Spot Index slipped to its weakest stage since Jan. 6 and was on observe for its worst two-day stretch in about a month. The euro rose to a more than two-week high whereas the Swiss franc led positive aspects within the Group-of-10 currencies.

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Elias Haddad, international head of markets strategy at Brown Brothers Harriman & Co., stated that greenback weak point possible displays elevated hedging by non-US traders who maintain greenback securities.

Trump has threatened to impose tariffs on European nations that oppose his plans to take control of Greenland, sparking fears of a main commerce confrontation. The US president has additionally floated 200% tariffs on French wine and champagne after President Emmanuel Macron rejected an invitation to affix his newest peace initiative.

The US currency prolonged losses on Tuesday after a Danish pension fund that had about $100 million in Treasuries on the finish of 2025 stated the US is no longer “good credit” and dedicated to promoting the bonds. Earlier within the day, Treasury Secretary Scott Bessent had urged calm and dismissed the concept Europe may dump Treasuries and different US property.

Short-dated volatility firmed as final 12 months’s sample of a weaker greenback coinciding with greater hedging prices re-emerged. Euro choices quantity rose, reflecting each demand for cover and a renewed want to place for a near-term transfer greater, in what quantities to the sharpest bullish repricing for the common currency since early August.

“Markets have reacted but there’s clearly room for bigger moves if the rhetoric increases further,” Jim Reid, international head of macro analysis and thematic strategy at Deutsche Bank AG in London, wrote in a be aware.

Still, the strikes are unlikely to resemble the sharp losses of April 2025 as merchants outdoors the US now have more applicable hedging ratios on US property, stated Chris Turner, head of FX strategy at ING.

In stream phrases, choices positioning leaned towards the dollar. Data from the Depository Trust & Clearing Corporation show traders have favored long publicity within the euro and the Australian greenback versus the greenback since Monday’s open.