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Wall Street lost steam last week as markets grappled with widening policy uncertainty, which went well beyond Greenland. While earnings continued to drive stock-specific volatility—notably Intel’s 17% plunge—the broader narrative was one of investor fatigue with U.S. policy reversals and an expanding range of potential escalation points.Gold extended its rally, climbing 8.5% amid intensified safe-haven demand amid geopolitical tensions and lingering concerns over Federal Reserve independence. However, the biggest development was the US dollar's sharp underperformance across the board. It had the worst week in months, with losses exceeding 3% against both AUD and NZD, approaching 3% versus CHF, and nearing 2% against EUR and GBP.Traditional catalysts didn't drive this weakness as economic data remained relatively resilient. Fed rate expectations barely moved, and equity indices remained within prior ranges. Instead, the weakness reflects a growing policy risk premium getting priced into U.S. assets – and US dollar is the primary release valve for that unease.Trump administration threats of tariffs against Canada over its China trade deal, combined with reports of a potential oil blockade on Cuba, expanded the perceived range of U.S. policy options and normalized ideas previously considered tail risks. NZD and AUD excelled, as domestic data revived rate-hike speculations, while CHF followed closely. JPY rebounded on suspected government intervention, with USD/JPY drawing ...Full story available on Benzinga.com
