REFILE-FOREX-Dollar at week low as geopolitics revive 'Sell America' trade
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 US stocks and government bonds The dollar index which measures the greenbacks strength against a basket of six currencies slid 01 to 99004 - its lowest level since January 14 as investors worried about exposure to US markets On Monday US President Donald Trumps renewed tariff threats against European allies triggered a repeat of the so-called Sell America trade that emerged after last years Liberation Day tariff announcement in April with stocks Treasury bonds and the dollar all selling off US 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 US leadership potential retaliation and an acceleration of de-dollarization trends said Tony Sycamore market analyst at IG in Sydney While there are hopes the US 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 US 10-year Treasury bond was up 30 basis points at 42586 Fed funds futures are pricing an implied 945 probability that the US central bank will remain on hold at its next two-day meeting next week little changed from Friday according to the CME Groups FedWatch tool Against the yen the dollar was flat at 158175 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 countrys shaky public finances Against the Chinese yuan trading offshore in Hong Kong the dollar was holding steady at 69536 yuan Later on Tuesday the Peoples 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 01 at 06710 while the New Zealand dollar slipped 01 to 05794 edging back from a two-week high The euro was flat at 11640 while the British pound was also steady at 13427 Bitcoin was off 06 at 9233699 while ether fell 11 to 317441
