Trump declares trade war over Greenland



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18year
Weekly Update
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waterman
Written by Dan Waterman
January 19th, 2026
Traders and investors brace for what is a curious and uncertain-looking week ahead..



GBP
Data-wise, the Pound 'could' be set for a positive week, but Trump and geopolitics will have their say too on what happens this week.

For the third week in a row and still dominating the start of 2026 is President Trump. This time escalating all things Greenland related and slapping a 10% levy on UK & EU imports from February 1st, rising to 25% by June if the nations still block the US from buying/taking/invading Greenland.

As this is an unfolding story, it's too early to tell how much exactly this hurts GBP so we will have to wait and see what happens next.

Tomorrow, the UK offers up jobs data for November. The unemployment rate is expected to fall with more jobs available and less redundancies, as-well-as a steady fall in the still very high average earnings figures. Overall a net-positive outcome for Sterling is expected here.

UK inflation for December could reveal a slightly higher than previous number, but because November's drop was far larger than anticipated anyway, this should be a non-event (unless inflation falls further than forecast which is possible).  

Retail sales for December are being released on Friday and should be decent because of the time of year (Christmas) and so GBP may see a small bump here. PMI data could go either way because of the month, so we foresee some volatility on Friday.

£-€1.1550 mid-market remains a brutal key resistance point though..




EUR
Just like it did last year when President Trump was making all the headlines, the Euro increases in value.

The 'sell America' theme was big business last year even though the EU was directly involved in Trump's trade tariff noise (as it is once again). With the other safe-haven currencies either very volatile (JPY) or too low in yield offerings (CHF), the Euro capitalized.

EU leaders have called for an emergency summit (likely Wednesday at Davos) to discuss the situation and will naturally retaliate with their own trade tariffs. Other than Trumps tantrums, it's another quiet week for the Euro-Zone apart from Friday's renewed PMI battle with the UK.



USD
President Trump earned himself a funny and yet suitable nickname last year which has been revived again over the weekend. No not that one. This one, 'TACO'.

'TACO' meaning; Trump Always Chickens Out. The theme is Trump strong-arms his opponents at the start with a maximalist strategy and then pulls back as some elements of a deal unfold. 

Of course, because he is the most powerful person in the world, when he says wild things, financial markets must move just in case he is telling the truth. This is what we saw a lot last year and this is what we are seeing once again with stock markets down and gold up today.

Trump does appear adamant on taking Greenland and in doing so would add to his legacy, something he is obviously very keen on, so what happens here is really uncertain, but it's expected to be USD negative. 

The US offers plenty of important data releases this week too (including GDP), so it's a very tricky looking week ahead for financial markets. 


Please check out the main events of the week below..