Trump's Tariff Threats Plunge Dollar, Elevate Safe-Haven Currencies

The dollar's value fell as Trump's tariff threats against Europe over Greenland caused investors to retreat to safer currencies like the yen and Swiss franc. The euro and pound rebounded after initial drops, while EU diplomats prepare to counter U.S. tariffs. Analysts maintain the dollar's safe-haven status despite its decline.

The U.S. dollar witnessed a sharp decline on Monday following President Donald Trump's announcement of new import tariffs targeting European allies, involving an additional 10% tariff from February 1 until America is allowed to purchase Greenland. This triggered an investor shift towards safe-haven currencies like the Swiss franc and the Japanese yen.

European Union ambassadors convened to strategize against these tariffs, with plans to counteract them should they take effect. Despite a brief slump, European currencies such as the euro and pound managed to recover. Experts suggest the tariff threats contribute to the dollar's weakening, although U.S. assets retain intrinsic safe-haven value.

Meanwhile, the dollar dipped against both the Swiss franc and Japanese yen. Market experts, however, advise caution, citing the persistent global dominance of U.S. markets. Factors such as domestic Japanese politics and fiscal stimulus expectations weigh on the yen's performance, while cryptocurrencies echoed the dollar's drop.

(With inputs from agencies.)