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Singapore The dollar retreated to
its lowest level in a week in early trading on Tuesday after
threats from the White House towards the European Union over the
future of Greenland triggered a broad selloff across U.S. stocks
and government bonds.
The dollar index, which measures the greenback’s
strength against a basket of six currencies, slid 0.1% to 99.004
– its lowest level since January 14 as investors worried about
exposure to U.S. markets.
On Monday, U.S. President Donald Trump’s renewed tariff
threats against European allies triggered a repeat of the
so-called “Sell America” trade that emerged after last year’s
Liberation Day tariff announcement in April, with stocks,
Treasury bonds and the dollar all selling off. U.S. markets will
return on Tuesday following a public holiday for Martin Luther
King Jr. Day.
Investors were dumping dollar assets on “fears of prolonged
uncertainty, strained alliances, a loss of confidence in U.S.
leadership, potential retaliation and an acceleration of
de-dollarization trends,” said Tony Sycamore, market analyst at
IG in Sydney.
“While there are hopes the U.S. administration may soon
de-escalate these threats, as it has with prior tariff
announcements, it is clear that securing Greenland remains a
core national security objective for the current
administration,” he added.
The yield on the U.S. 10-year Treasury bond was up 3.0 basis
points at 4.2586%. Fed funds futures are pricing an implied
94.5% probability that the U.S. central bank will remain on hold
at its next two-day meeting next week, little changed from
Friday, according to the CME Group’s FedWatch tool.
Against the yen, the dollar was flat at 158.175 yen
after Japanese Prime Minister Sanae Takaichi called snap
elections for February 8. Her vow to suspend an 8% sales tax on
food for two years has focused attention on the country’s shaky
public finances.
Against the Chinese yuan trading offshore in Hong Kong
, the dollar was holding steady at 6.9536 yuan. Later on
Tuesday, the People’s Bank of China is expected to leave
benchmark lending rates unchanged for an eighth straight month
in January, a Reuters survey showed.
The Australian dollar was down 0.1% at $0.6710, while
the New Zealand dollar slipped 0.1% to $0.5794, edging
back from a two-week high.
The euro was flat at $1.1640, while the British pound
was also steady at $1.3427.
Bitcoin was off 0.6% at $92,336.99, while ether
fell 1.1% to $3,174.41.
(Reporting by Gregor Stuart Hunter
Editing by Shri Navaratnam)
Published on January 20, 2026