The dollar dropped to a two-week low against major currencies as President Trump escalated trade tensions. Investors reacted to his threats of new tariffs on France and unconventional comments about Greenland. Currency markets showed immediate stress as the greenback weakened broadly.

Currency hedging costs rose sharply, reflecting increased volatility expectations. Traders scrambled to protect positions amid growing uncertainty. The Dollar Index fell 0.3%, marking its weakest level since early August. European and Asian currencies gained ground as risk sentiment shifted.

Market participants are watching Federal Reserve signals closely. Any dovish comments could amplify dollar weakness. Investors expect continued trade war volatility through year-end. Corporate treasurers are likely to delay major currency decisions until clearer policy signals emerge.