US President-elect Donald Trump has sparked a decline in the dollar after saying he will not impose trade tariffs on his first day in office. The Wall Street Journal reported that Trump plans to issue a broad trade memo, stopping short of imposing new tariffs via executive orders. This move has eased market expectations and caused the dollar index to fall by 1.3% to $108.23.
The euro jumped 1.3% to $1.04, while the Chinese yuan strengthened by 1%. The yen also held firm ahead of the Bank of Japan’s policy meeting this week. Bitcoin hit a record high at $109,071.86, driven by Trump’s promise to be a “crypto president”.
Trump’s decision has caused investors to reassess their expectations for the US economy and monetary policy. Analysts now believe that targeted import levies may be introduced shortly after inauguration day, rather than widespread tariffs.
Market participants are taking comfort from the news, but experts warn that this confidence might be misplaced. They note that Trump’s trade policies will still have a significant impact on the global economy. The dollar has risen 4% since the November presidential election, driven by anticipation of Trump’s policies boosting growth and inflation.
Source: https://www.reuters.com/markets/currencies/dollar-steady-markets-await-trump-inauguration-2025-01-20