Key Moments
- The dollar falls to a new two-week low after a strong start to 2026.
- EUR/USD climbs 0.5% toward 1.1700 after breaking key hourly moving averages.
- USD/JPY holds near 158.20 as the yen stays weak after Japan calls a snap election.
Political Turbulence Hits the Dollar Again
The dollar is struggling again this year. After a strong start in 2026, it has slid to fresh two-week lows. This decline reflects growing concern over the US administration’s unpredictable policy approach.
The latest pressure came after President Trump stepped up his rhetoric on Greenland and threatened tariffs on Europe. As a result, geopolitical risk is spilling into trade and economic uncertainty.
Previously, Trump created a so-called “TACO” situation through actions in Venezuela and other foreign policy moves. The Greenland issue now looks different in both tone and potential impact.
Even if the confrontation does not change outcomes fundamentally, markets are no longer willing to wait. Dollar selling has accelerated, reflecting widespread skepticism about US policy stability.
Trump's Greenland push sparks tariff threats on NATO allies, fueling geopolitical fears. US futures plunge 1-2%, dollar weakens, yields rise to 4.265%, while gold surges to record highs as safe-haven demand spikes. pic.twitter.com/hzHqfv1Aem
— MR.K🛰️ (@kevin50215) January 20, 2026
Euro Advances as Technical Picture Turns More Positive
EUR/USD is gaining ground as the dollar weakens. The pair is up 0.5% and moving toward 1.1700 after breaking above key hourly moving averages for the first time this year.
This technical break has shifted the short-term bias toward the euro, adding momentum to the dollar’s decline during the session.
| Currency Pair | Move Described | Level Referenced | Commentary |
|---|---|---|---|
| EUR/USD | Up 0.5% | Approaching 1.1700 | Broke key hourly averages; near-term bias turns bullish |
| USD/JPY | Near unchanged | 158.20 | Yen stays weak despite broad dollar softness |
De-dollarization Theme and Market Perception
The article notes that de-dollarization and currency debasement remain key themes. This trend continues as long as policy uncertainty persists. Under these conditions, the outlook stays negative for the US dollar.
Moreover, the market’s quick reaction to tariff tensions highlights fragile confidence in the dollar. Each policy surprise strengthens the narrative that investors seek alternatives or hedges against US risk.
Yen Struggles Despite Dollar Weakness
The Japanese yen remains weak even as the dollar slides. USD/JPY holds near 158.20, suggesting that traders do not view the yen as a safe haven right now.
This weakness follows Japan’s snap election announcement for Feb. 8. In other words, the yen may face more pressure if it cannot rise on potentially supportive news.
The piece ends with the question: Tokyo intervention when? This highlights growing speculation that authorities may step in to support the currency.
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