Dollar Softens as Trade Tensions Drive Markets (01.20.2026)

Trump’s proposed "Peace Board" has triggered divided global reactions, with nations like Argentina and Morocco showing support while others, led by France, reject or seek revisions due to concerns over the $1 billion membership fee and the potential erosion of UN authority.

The euro rebounded toward 1.1640 places the US dollar eased following renewed tariff threats tied to the Greenland dispute. The yen held near 158 amid Japan’s snap election call and BOJ policy focus, while gold stayed close to record highs on strong safe-haven demand. Sterling recovered alongside the softer dollar, and silver cooled slightly after recent record gains as markets balanced geopolitical risks against restrictive US rates.

Euro Recovers as Dollar Softens

The euro recovered to $1.1640 on Tuesday, climbing from a three-month low as the U.S. dollar softened following President Trump’s latest trade threats. His plan to levy 10% tariffs on European nations over the Greenland dispute has provided temporary support for the euro, though persistent geopolitical risks cap further gains. Analysts warn that these tensions could strain NATO alliances and provoke EU retaliation, maintaining a high level of market uncertainty.

Technically, 1.1600 is the key support, while resistance is seen at 1.1680.

Yen Steady Near 158 Amid Snap Election Call

The Japanese yen hovered around 158 on Tuesday as political uncertainty intensified. Prime Minister Sanae Takaichi has officially called a snap election for February 8, seeking a mandate for her economic reforms. Meanwhile, the Bank of Japan’s policy meeting remains a central focus; while rates are expected to stay at 0.75%, traders are on high alert for hawkish signals or potential intervention to defend the currency.

Technically, resistance stands near 158.30, while support is firm at 157.40.

Gold Holds Strong Near $4,670

Gold maintained its strength near $4,670 on Tuesday, driven by intense safe-haven demand. Tensions between the U.S. and Europe have reached a fever pitch following President Trump's tariff threats over the acquisition of Greenland. Denmark has responded by increasing its military presence on the island, while EU leaders prepare countermeasures. This geopolitical friction, combined with anticipation for Thursday's U.S. PCE inflation data, continues to support bullion's record-breaking momentum.

Gold sees support near $4615, while resistance is around $4700.

Sterling Rebounds Toward $1.342

The British pound rose to $1.342 on Tuesday, recovering from a recent four-week low. This bounce was largely driven by a softening U.S. dollar, which faced pressure following President Trump’s renewed tariff threats over the Greenland dispute. While the prospect of trade duties on UK goods has sparked talk of retaliation, Sterling remains supported by recent upbeat GDP data. Investors now await this week's critical inflation and employment figures to gauge the Bank of England's next move.

From a technical view, support stands near 1.3400, with resistance around 1.3460.

XAG/USD Cools Near $93.60

Silver prices softened to $93.60 during Tuesday's Asian session, as traders locked in gains following a climb to record highs. While the U.S.–EU trade standoff over Greenland continues to reinforce silver's safe-haven appeal, persistent expectations for restrictive Federal Reserve policy are curbing the non-yielding metal’s advance. This tension between geopolitical support and high interest rates remains the primary driver for near-term price action.

From a technical view, resistance stands near $94.10 while support is located around $91.70.