US Dollar Retreats on Geopolitical Tensions **Executive Summary** The U.S. dollar depreciated on Monday as escalating trade tensions between the United States and the European Union drove a "flight to safety" across global currency markets. **Key Drivers** * **Tariff Threats:** Sentiment soured following President Trump’s issuance of new tariff threats against European nations, linked to ongoing disputes regarding Greenland. * **EU Retaliation Risks:** Major EU member states issued strong condemnations of the proposed tariffs. Notably, France has proposed economic countermeasures, raising fears of a tit-for-tat trade war. * **Safe-Haven Inflows:** The heightened risk aversion prompted investors to unwind long dollar positions in favor of traditional safe-haven currencies, specifically the **Japanese yen (JPY)** and the **Swiss franc (CHF)**.