The dollar fell while precious metals rose on Sunday as financial markets began to react to President Donald Trump’s policies New tariff threats.
The dollar fell 0.31% against the euro to $1.16 and fell 0.32% against the yen to 157.58. Meanwhile, gold prices rose 1.95% to a new record of $4,684.30 an ounce. Silver rose 5.66% to $93.53, also hitting a new high.
U.S. stock and bond futures were inactive due to the Martin Luther King Day holiday on Monday.
On Saturday, Trump said Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland would impose 10% tariffs starting on February 1 and rising to 25% on June 1 until “a comprehensive agreement to purchase Greenland is reached.”
The news comes after the countries sent troops to Greenland last week at Denmark’s request, ostensibly for training purposes.
Trump has refused to make concessions on taking over Greenland, even leaving open the military option, while the administration has also left open the possibility of buying the island.
Meanwhile, the EU is weighing retaliatory options, including Anti-coercion tools Due to its scope and severity, this has been called a “trade bazooka.”
Trump’s latest tariffs not only pose an existential threat to the transatlantic alliance, but their consequences could also threaten the dollar’s dominance and alleged exorbitant privileges.
“The dollar’s reserve currency status allows us to live beyond our means,” said Peter Schiff, chief economist and global strategist at Europacific Asset Management. “Soaring debt, tariffs and military threats jeopardize that status.” Warn about X. “Once that is lost, economic collapse will follow.”
besides EU has huge influence over Trump European countries hold $8 trillion in U.S. bonds and stocks, nearly twice as much as the rest of the world combined, said George Saravelos, director of foreign exchange research. Deutsche Bank.
Rep. Thomas Massie of Kentucky, whose vulnerability to global financial markets is not lost on him, responded to Schiff’s post.
“As the dollar’s reserve currency status declines, so does our ability to tax the world by creating more money.” he wrote. “When reserve status is lost, maintaining current spending levels and paying down debt will be more painful for Americans who will bear the full inflation tax.”