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Forex

Dollar’s Slide Shows Investors Might Return With “Sell America” Theme

ADMIN || 20th January 2026

Europe’s pushback against Trump’s Greenland ambitions hardened overnight, and that was enough to accelerate declines for the US dollar and also send Treasury futures lower. The negativity from President Trump’s disruptive policies looks to be generating at the very least a reluctance to add to US assets among investors. There are clear signs traders are positioning for a revival of last year’s “Sell America” theme.

In many ways that narrative was oversold, even at the time. The greenback’s worst 1H loss since 1973 was also driven by investors moving to price in risks suddenly associated with US assets where few had anticipated them, foreign holdings of Treasuries and US equities rose handily to records.

Bloomberg Dollar Spot Index fell 0.3% yesterday, its steepest slide since Dec. 23, and the currency weakened against every major developed peer. The broad retreat might have been greater if not for Japan’s election announcement, after which USD/JPY almost fully erased a decline that was as much as 0.4%.

Europe does hold some $10t of US assets, so if the Greenland situation escalated and there were serious moves to trim those holdings there would be an enormous impact. That looks extremely unlikely it’s not realistic to think there’d be any kind of organized selling, or even official pressure to sell. But as long as the Europe-US relationship is souring, demand for the US dollar is unlikely to rebound dramatically.

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