Market Shift: Dollar Plummets as Trump Takes Office
As the world watched President-elect Donald Trump take the oath of office, the dollar took a significant hit, falling broadly against major currencies. Meanwhile, European stocks surged, with the pan-European STOXX 600 rising 0.3% and the region’s main indices up roughly 0.5%.
A New Era of Uncertainty
Trump’s inauguration has brought a sense of unpredictability to the markets. His campaign promises of tariffs and trade restrictions have left investors on edge, wondering what the future holds for global trade. However, a report by the Wall Street Journal suggests that Trump may not impose import tariffs immediately, providing a glimmer of hope for those fearing a trade war.
Currency Markets in Flux
The dollar’s decline was particularly pronounced against the currencies of the United States’ largest trading partners, including the Canadian dollar, Mexican peso, euro, and Chinese yuan. The euro, in particular, rose 1.3% on the day, set for one of its largest one-day rallies since late 2023.
Bitcoin Soars to New Heights
In other news, Bitcoin hit an all-time high of $109,071.86 in early European trading, before falling back to trade around $106,030.10, still a 1.2% gain for the day. The world’s largest cryptocurrency has surged more than 10% so far this month.
Commodities React to Trump’s Inauguration
Gold rose 0.2% to $2,708 an ounce, while Brent crude futures fell 1.2% to $79.82, and U.S. crude dropped 1.6% to $76.62. The decline in oil prices is attributed to expectations that Trump may ease curbs on Russia’s energy sector in return for a truce in Ukraine.
Expert Insights
Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management, noted that the perception of an open door to negotiations is important, but the details of tariffs and their impact on specific sectors remain unclear. “The fact that he might be choosing a gradual approach is an encouraging sign,” he said.
As the world adjusts to a new era of American leadership, one thing is certain – the markets will continue to be shaped by Trump’s policies and actions. Stay tuned for further developments.
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