During the recent Greenland dispute, Donald Trump’s threat of tariffs on European allies caused an unusual rise in the Australian dollar vs the US dollar. Typically, the Australian dollar falls in times of global uncertainty. When Trump withdrew the tariff threat after naming a “framework” deal, the Australian dollar rose even more. This shows that both bad news (Trump’s tariff threat) and good news (removal of threat) boosted the Aussie currency. Since Trump’s inauguration over a year ago, the Australian dollar has climbed from below 63 US cents to above 68 US cents. This rise goes against expectations, as many predicted a stronger US dollar under the “Trump trade.” Instead, investors are moving money out of US assets and currency in a “sell America trade” due to economic and policy risks linked to Trump’s administration. One example is the Danish pension fund AkademikerPension, which recently sold US Treasury holdings worth about $100 million, citing weak US government finances. However, the US tech sector, led by artificial intelligence, remains strong and supports US equities. Factors fuelling the “sell America” trend include the Greenland tariff dispute, attacks on the Federal Reserve’s independence, and worries about rising US government debt. AMP’s chief economist Shane Oliver explains, “In a normal crisis, the US dollar would go up as a safe haven. The difference is that this period of uncertainty was at its core seen as negative for the US.” Each of Trump’s “erratic” moves erodes US exceptionalism and increases the risk premium on US investments, pushing the dollar down. The trend links to the “debasement trade,” which bets that the US dollar is losing trust because of high government debt and inflation. Many investors are buying gold, pushing it to record prices. Australia benefits as its dollar is tied to gold, silver, and iron ore, whose prices remain strong. Financial commentator Michael McCarthy says, “Commodity prices are trading at much higher levels than forecast, which supports the Aussie dollar as we are a major commodity exporter.” A strong jobs market in Australia also lifts the currency as it fuels expectations for an interest rate hike, which usually boosts currency value. Meanwhile, the US Federal Reserve is expected to lower rates, creating a gap between US and Australian interest rate outlooks. This difference further strengthens the Australian dollar. Most analysts foresee the Australian dollar rising further, though not steadily. Sudden changes, especially in interest rates or global crises, could quickly reverse the trend. In a major economic shock, demand for commodities would drop, hitting Australian exports and the currency hard. Jonathan Barrett, Guardian Australia’s business editor, reports on these shifts that define the curious strength of the Australian dollar amid global uncertainty.