FX.co ★ Dollar Pressured by US-Europe Tensions

The dollar index declined to approximately 98.5 on Wednesday, marking its third straight session of losses. This downturn comes as tensions intensified between the US and Europe, following President Donald Trump's recent threats regarding Greenland, which have dampened confidence in American assets. Over the weekend, President Trump warned that he would impose new tariffs on eight European nations that oppose his Greenland acquisition plan. In response, the European Union indicated its willingness to levy tariffs on $93 billion worth of US goods, with France reportedly advocating the use of the Anti-Coercion Instrument by the bloc. Concerns also heightened over the possibility of Europe leveraging its significant US stock and bond holdings amid the escalating trade conflict. A Danish pension fund's decision to reduce its holdings of US Treasuries underscored these worries. Investors are now focusing on an impending US Supreme Court decision regarding the legality of pivotal aspects of Trump's trade policies. The dollar weakened against most major currencies, though it remained stable against the yen, despite growing fiscal apprehensions in Japan.