Dollar dented as Trump tariff threats drive investors into safe havens

Core Viewpoint - The dollar has declined as investors seek safe-haven currencies like the Swiss franc due to U.S. President Trump's tariff threats against Europe, particularly regarding Greenland [1][2]. Group 1: Market Reactions - European leaders are working to prevent a trade war and have agreed to enhance efforts to dissuade Trump from imposing tariffs while preparing retaliatory measures [2]. - The euro increased by 0.3% to $1.163, and the pound rose by 0.27% to $1.3415 amid the dollar's decline [3]. - The Swiss franc is experiencing its largest daily rise against the dollar in a month, reflecting a shift towards safe-haven assets [2]. Group 2: Analyst Insights - Analysts note that typically, tariff threats would weaken the euro, but heightened policy uncertainty from the U.S. has led to dollar weakness instead [4]. - Despite some capital movement away from the dollar, analysts caution that the dollar's safe-haven status remains intact, and further escalation could lead investors back to U.S. currency [5]. - The size of the U.S. market ensures that it retains some safe-haven value, even if non-U.S. investors consider moving their capital [6]. Group 3: Currency Performance - The dollar fell by 0.5% to 0.7984 Swiss francs and slightly decreased against the Japanese yen, which is also considered a safe-haven currency [7].