USD hit as “sell America” trade returns
US shares returned from the holiday break with sharp losses as worries about President Trump’s push to take control of Greenland rattled markets.
The S&P 500 fell 2.1%, while the tech-focused Nasdaq lost 2.5%.
Investors are watching for potential retaliation from European countries after Trump announced new tariffs on eight European nations over the weekend.
The US dollar lost further ground overnight, with the USD index down 0.8% and falling to a two‑week low.
The Aussie and kiwi led gains versus the US dollar. AUD/USD rose 0.3% as it neared 15‑month highs, while NZD/USD climbed 0.5% toward four‑month highs.
All eyes are now on President Trump’s speech to the World Economic Forum in Davos, due at 12.30am AEDT.
Trump avoids “force” question on Greenland, slams Europe focus
President Donald Trump said “no comment” when asked whether he would use force to seize Greenland during an interview with NBC News.
Pressed on whether he would impose tariffs on European nations without a Greenland deal, Trump replied: “I will, 100%.”
He criticised European leaders for focusing on Greenland instead of the war in Ukraine.
“Europe ought to focus on the war with Russia and Ukraine because, frankly, you see what that’s gotten them,” Trump said. “That’s what Europe should focus on — not Greenland.”
Looking across APAC FX, USD/SGD fell overnight and now sits in the middle of its one‑month range. The pair is 1% above the recent low of 1.2698, last seen on July 1.
Resistance sits near the 50‑day EMA at 1.2898, followed by the 100‑day EMA at 1.2918.
USD/CNH continues to weaken, with the pair at its lowest level since May 2023.
USD/JPY bucks trend as Japan weighs tax cut timing
Japan’s economic revitalization minister Minoru Kiuchi said the government will review when tax cuts can realistically begin. He noted that non‑tax revenue and trimming excess subsidies could help fund a potential sales‑tax reduction, while stressing the need to maintain fiscal discipline.
Kiuchi added that officials will study the impact of food‑related tax cuts on borrowing costs and currency moves, highlighting the importance of stability in stocks and exchange rates. He said authorities will continue monitoring developments with urgency.
Global markets remain nervous around Japan’s bond markets, with the benchmark 10‑year yield rising to 2.34% from 2.19% at the start of the week.
USD/JPY was one of the few markets where the USD gained overnight. The pair has climbed nearly 1% against the yen this year and now trades above 158.00 ahead of Friday’s Bank of Japan decision.
Support sits at the 21‑day EMA of 157.38, followed by the 50‑day EMA of 156.09.
The pair remains at the lower end of its rising channel — a setup that could signal continued strength.
Aussie, kiwi lead gains
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 19 – 24 Jan
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
