Core Viewpoint - The US dollar has fallen to its lowest level in two weeks, influenced by President Trump's aggressive stance on international trade and currency hedging costs have increased as a result [1][3]. Currency Market Impact - The Bloomberg Dollar Spot Index has reached its weakest level since January 6, indicating a potential for the worst two-day performance in about a month [1]. - The euro has risen to a more than two-week high, while the Swiss franc has shown the most significant gains among Group-of-10 currencies [1]. Investor Behavior - Increased hedging by non-US investors holding dollar securities is likely contributing to the dollar's weakness, as noted by the global head of markets strategy at Brown Brothers Harriman & Co. [2]. - There has been a notable rise in euro options volume, reflecting heightened demand for protection and a bullish sentiment towards the euro, marking the sharpest bullish repricing since early August [5]. Trade Tensions - President Trump has threatened to impose tariffs on European nations opposing his Greenland acquisition plans, raising concerns about a potential trade confrontation [3]. - A Danish pension fund has expressed a lack of confidence in US creditworthiness, committing to sell approximately $100 million in Treasuries, which has further pressured the dollar [4]. Market Reactions - Short-dated volatility has increased, aligning with the historical trend of a weaker dollar coinciding with higher hedging costs [5]. - Options positioning has shifted against the dollar, with investors favoring long positions in the euro and Australian dollar since the beginning of the week [7].