Trump's tariff threats intensify, where will the US dollar and euro go?

【BlockBeats】The market sentiment has shifted again. Currently, the U.S. President is considering imposing new tariffs on European countries, with the issue centered around Greenland’s territorial disputes. This policy uncertainty directly impacts the dollar, putting pressure on it.

David Forrest, an analyst at Faron Credit, pointed out that Trump’s tariff threats have reignited the trading sentiment of “selling the US.” But there’s a detail—traders are paying attention to the so-called “TACO trade,” which is betting on Trump backing down at the last minute. The reason is simple: tariff threats may essentially be bargaining chips, and the likelihood of actual implementation is doubtful. This expectation, in turn, provides some support to the dollar.

What’s more worth pondering is the situation in Europe. By 2026, the geopolitical situation is expected to continue deteriorating, and the euro may face challenges more severe than anticipated. Tariff pressures will further drag down the Eurozone economy, and Europe’s influence over Russia regarding Ukraine will also weaken. In other words, the euro will become one of the biggest victims in this round of geopolitical game.