FX.co ★ Dollar Holds Decline on Heightened Tensions

On Tuesday, the dollar index remained close to 99, following a significant drop in the preceding session. This decline was attributed to increasing tensions between Washington and Europe, sparked by President Donald Trump's controversial proposal to purchase Greenland. Over the weekend, Trump cautioned that eight European countries opposing his plan might face a 10% tariff beginning February 1, escalating to 25% by June 1 unless an agreement on Greenland is secured. European leaders have condemned these statements as unacceptable, while contemplating potential retaliatory measures. Analysts have pointed out that Europe holds approximately $10 trillion in U.S. bonds and equities, including substantial public sector investments, which could become instrumental in a growing trade conflict. Amidst these developments, investors are now turning their attention to crucial U.S. economic data set for release this week, such as the PCE price indices, a subsequent estimate of the Q3 GDP, S&P PMI figures, and the University of Michigan's consumer sentiment survey.