EUR Rises as U.S Interest in Greenland Weakens Dollar Index
The euro (EURUSD) strengthened in the foreign exchange market as tensions mount over the U.S. efforts to assert control over Greenland, a semi-autonomous region of Denmark.
EURUSD surged to around $1.162, recovering from an earlier three-month low of $1.158, supported by rising investor confidence amidst dollar weakness.
FX trades reported that US dollar weakened following fresh tariff threats from President Donald Trump. Trump has warned of imposing 10% tariffs on several European countries in an effort to pressure Denmark into selling Greenland to the US.
European states are reportedly considering retaliatory tariffs and broader punitive economic countermeasures against the U.S. after Trump threatened fresh export levies, deepening a rift over Greenland.
Trump said that eight European countries would face increasing tariffs, starting at 10% on Feb. 1 and rising to 25% on June 1, if a deal is not reached allowing Washington to acquire Greenland, the mineral-rich island,
Any such tariffs would likely trigger trade rerouting within the EU. The UK and Germany, which have the largest export exposure to the US, would be the most affected: a 10% tariff could shave roughly 0.1% off GDP, while a 25% levy could reduce output by 0.2%–0.3%.
However, gains in the common currency were capped by growing concerns over the serious political and geopolitical ramifications of the move. Analysts warn that any attempt to seize Greenland could cause irreparable damage to NATO and strain transatlantic relations.
The euro settled last week on a soft note, below $1.16, and eased below $1.1575 in early dealings today. It has not been here since the end of last November. However, the euro recovered fully as the dollar-negativity of the developments was appreciated. The euro reached $1.1640 before stalling.
The pre-weekend high was a little above $1.1625, and a close above there complete the ostensibly bullish technical outside day. Options for 2.1 euros at $1.1585 expire today.EU to Hold Emergency Summit over Trump’s Greenland Threats
