The dollar index hovered around 99 on Tuesday after a sharp fall in the previous session, as escalating tensions between Washington and Europe over President Donald Trump’s proposal to purchase Greenland undermined confidence in US assets. Over the weekend, Trump warned that eight European countries opposing the plan could face a 10% tariff from Feb. 1, rising to 25% on June 1 unless a deal for Greenland is reached. European leaders condemned the rhetoric as unacceptable while weighing options for possible retaliation. Analysts cautioned that Europe holds around $10 trillion in US bonds and equities, including significant public sector holdings, which could be leveraged in an intensifying trade dispute. Meanwhile, investors are turning to key US data due this week, including the PCE price indices, another estimate of Q3 GDP, S&P PMIs and the University of Michigan consumer sentiment survey.