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The dollar is cooled by Trump's Arctic pantomime in the morning bid for Europe

Tom Westbrook gives us a look at what the future holds for European and global markets.

The Bank of Japan only did enough to keep the yen stable in the Asia session. They also boosted inflation forecasts, but this didn't deter the market from expecting two rate hikes for the year.

Dollar was also under pressure in general as investors may have anticipated that the Greenland drama of the past week will make the U.S. less attractive as an investment destination.

The world's net long U.S. positions total $27,6 trillion. This leaves a lot of room to trim.

After retracting tariff threats, President Donald Trump claimed that he had secured permanent and total U.S. access in Greenland through a deal reached with?NATO. The head of the alliance said that allies must increase their commitment to Arctic security.

The European Union leaders breathed a huge sigh and said that they wanted a trade agreement between the EU and USA to get back on track. However, they warned that they would be ready to take action if Trump threatened them again.

In a major speech delivered at Davos, Canadian Prime Minister Mark Carney criticized powerful nations for using tariffs and economic integration as weapons.

The stock market in Asia was up, but a 'after-hours plunge in Intel shares indicated a brewing strain in the chip supply chains. The company claimed it was unable to meet the demand for its server chips used in data centres, and its stock fell 13%.

China raised its official yuan guide to the higher side of?7 per dollar for the first since 2023. This is lower than the market's expectations, but it is seen as a tacit endorsement.

The following are key developments that may influence the markets on Friday.

- PMIs for Europe and the U.S.

- U.S. consumer sentiment

(source: Reuters)