AUD/USD Advances as Greenland Rift Weighs on U.S. Dollar

Written by Sandra Leggero

Sandra Leggero has a background in financial markets, having spent more than 9 years in commodities trading for several European and Asian companies. She holds a degree in Economics from the University of Pavia and specializes in emerging markets.

, | Updated: January 20, 2026

Key Moments

AUD/USD trades 0.25% higher near 0.6730 during the European session as the US Dollar retreats.
The US Dollar Index falls 0.55% to around 98.50 amid tensions between the US and EU over Greenland.
Markets look ahead to Australian December employment data, with consensus pointing to a 30K job gain and a 4.4% jobless rate.

Aussie Gains as Greenback Loses Momentum

The AUD/USD pair is trading about 0.25% stronger, hovering near 0.6730 in the European session on Tuesday. The Australian Dollar is drawing support as the US Dollar underperforms against major peers, pressured by political frictions between the United States and the European Union related to the future of Greenland.

At the time of writing, the US Dollar Index (DXY) – which measures the Greenback’s performance against six leading currencies – is down 0.55% and trading close to 98.50.

US Dollar Performance Against Major Currencies

The table below details the current percentage changes of the US Dollar against a range of major currencies. On the day, the Greenback is weakest versus the Swiss Franc.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.69%	-0.37%	-0.19%	-0.30%	-0.25%	-0.71%	-0.95%
EUR	0.69%		0.33%	0.52%	0.39%	0.44%	-0.03%	-0.26%
GBP	0.37%	-0.33%		0.19%	0.07%	0.11%	-0.35%	-0.59%
JPY	0.19%	-0.52%	-0.19%		-0.12%	-0.08%	-0.55%	-0.78%
CAD	0.30%	-0.39%	-0.07%	0.12%		0.05%	-0.42%	-0.65%
AUD	0.25%	-0.44%	-0.11%	0.08%	-0.05%		-0.46%	-0.68%
NZD	0.71%	0.03%	0.35%	0.55%	0.42%	0.46%		-0.24%
CHF	0.95%	0.26%	0.59%	0.78%	0.65%	0.68%	0.24%

The heat map should be read by taking the base currency from the left-hand column and the quote currency from the top row. For instance, choosing the US Dollar on the left and moving horizontally to the Japanese Yen cell gives the percentage move for USD (base)/JPY (quote).

Greenland Dispute and “Sell America” Sentiment

The US Dollar has come under heavy selling pressure as the so-called “Sell America trade” gains traction. Investors are shifting toward alternative safe-haven assets amid concerns that relations between the US and the EU could deteriorate.

Over the weekend, US President Donald Trump imposed 10% tariffs on several EU countries and the United Kingdom after they opposed Washington’s efforts to purchase Greenland.

Amid these tensions, US Treasury Secretary Scott Bessent stated at the World Economic Forum in Davos that Washington will not terminate its NATO membership: Washington doesn’t intend to leave NATO’s membership amid disputes over Greenland.

Policy Outlook and Fed Leadership Comments

On the policy front, US Treasury Secretary Bessent indicated that an announcement on the next Chair of the Federal Reserve (Fed) could come soon, noting that the administration might reveal the nominee “as early as next week, and there are four candidates currently”.

Focus Shifts to Australian Labor Data and RBA Implications

Although recent price action has favored the Australian Dollar against the US Dollar, the Greenback is also lagging other major currencies as traders look ahead to Australia’s upcoming employment figures for December, due on Thursday. Market participants are expected to scrutinize the labor report for signals on the Reserve Bank of Australia’s (RBA) future monetary policy stance.

Consensus forecasts suggest that the Australian economy will have added 30K jobs, following a decline of 21.3K positions in November. The Unemployment Rate is projected to edge up to 4.4% from 4.3% previously.

Australian Employment Indicator Details

The Employment Change s.a. series, published by the Australian Bureau of Statistics, tracks the monthly change in the number of people employed in Australia, adjusted for seasonal patterns. A stronger Employment Change reading is typically associated with firmer consumer spending, stronger economic activity, and is considered supportive for the Australian Dollar. Conversely, weaker employment growth tends to be negative for the currency.