Dollar dented as Trump tariff threats drive investors into safe havens

By Amanda Cooper

LONDON, Jan 19 (Reuters) - The dollar fell connected Monday, arsenic investors piled into harmless havens similar the Swiss franc, aft U.S. President Donald Trump's latest tariff threats against Europe implicit Greenland sparked a wide risk-averse determination crossed markets.

Trump said implicit ​the play helium would enforce an further 10% import tariff from February 1 connected goods from Denmark, Norway, Sweden, France, Germany, ‌the Netherlands, Finland and Britain, until the U.S. is allowed to bargain Greenland.

European leaders were scrambling to avert a commercialized warfare and connected Sunday agreed to intensify their efforts to ‌dissuade Trump from imposing tariffs, portion besides preparing retaliatory measures should the duties spell ahead.

After dropping concisely successful overnight trading, European currencies including the euro, lb and Scandinavian crowns rose. The Swiss franc, a classical safe-haven, headed for its largest regular emergence against the dollar successful a month.

EURO BENEFITS FROM DOLLAR AVERSION

The euro was up 0.3% astatine $1.163 astir midday successful Europe, portion the lb was up 0.27% to $1.3415.

"Typically you would deliberation tariffs being threatened would pb to a ⁠weaker euro," said Khoon Goh, caput of Asia probe ‌at ANZ. "But, arsenic we've seen past twelvemonth arsenic well, erstwhile the 'Liberation Day' tariffs were getting enactment successful place, the interaction successful FX markets really has been much towards dollar weakness each clip determination is heightened argumentation uncertainty ‍emanating from the United States."

Investors dumped the dollar aft Trump unveiled sweeping tariffs connected the satellite past April, triggering a situation of assurance successful U.S. assets.

While immoderate question of superior retired of the dollar was evident connected Monday, astir notably with the Swiss franc's gains, analysts said a further escalation successful tensions could spot investors ​flock backmost to the U.S. currency.

"The marketplace has been understandably anxious astir the dollar's diminution successful worth since past April. But I would ‌really caution against assuming that the dollar's safe-haven presumption is gone," Rabobank main currency strategist Jane Foley said.

"Even if non-U.S. investors decided to instrumentality their wealth out, wherever would they go? Other markets aren't large capable to support that. The sheer size of the (U.S.) marketplace means that determination is ever going to beryllium immoderate safe-haven worth associated with U.S. assets," she said.

YEN STILL IN INTERVENTION ZONE

The dollar was down 0.5% connected the time astatine 0.7984 Swiss francs, and a fraction little against the Japanese yen, different non-U.S. safe-haven, astatine 158 yen.