The dollar dipped, and global markets remained cautious as Donald Trump began his second term as U.S. President. Investors anticipate significant policy announcements in the coming hours, potentially shaping global economic directions. Meanwhile, Bitcoin hit a record high near $109,000, signaling growing optimism in the cryptocurrency market.
Stocks Show Mixed Movements
Global stocks opened the week with minor gains. In Europe, the STOXX 600 index edged down 0.2%, reflecting cautious sentiment. Key indices in Spain and other eurozone countries showed slight declines. On a broader scale, MSCI’s All-World Index registered a modest 0.1% gain. Asian markets displayed more optimism, with Hong Kong’s Hang Seng index rising 1.8%.
Bond markets reflected similar caution. Yields on French, German, and UK bonds inched upward as investors braced for potential tariff announcements and monetary policy shifts.
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Dollar Retreats as Uncertainty Looms
The dollar, which has surged more than 8% against the euro since September, showed signs of cooling. Analysts suggest that the market may react negatively if Trump delays implementing the aggressive tariffs he has proposed. Current plans include tariffs of 10% on global imports, 60% on Chinese goods, and a 25% surcharge on Canadian and Mexican products. These measures, if enacted, could disrupt trade flows, raise costs, and invite retaliatory actions from trading partners.
In currency markets, the Canadian dollar hit a five-year low, while Japan’s yen strengthened slightly, bolstered by expectations of a Bank of Japan rate hike later this week.
Bitcoin Hits Record High
Bitcoin soared to a new milestone, briefly touching $108,943. The cryptocurrency market also saw excitement over Trump’s recently launched digital token, $TRUMP. Valued at nearly $12 billion, the token saw a dramatic surge before settling around $50. This marked a significant moment in the cryptocurrency space, highlighting the influence of Trump’s economic ventures on market trends.
Spotlight on U.S.-China Relations
China remains a focal point amid Trump’s tariff threats. Investors are closely monitoring the relationship between Trump and Chinese President Xi Jinping, especially following a promising phone call that left markets optimistic. The Chinese yuan touched a two-week high, buoyed by better-than-expected growth data and hopes of constructive trade talks.
“Trade negotiations between these two leaders have become a major indicator of future policies,” said Ken Peng, head of Asia investment strategy at Citi Wealth.
Commodities and Energy Adjust
In the commodities sector, gold remained steady at $2,707 an ounce, reflecting investor caution. Brent crude futures dipped slightly, as markets speculated that Trump might ease sanctions on Russia’s energy sector to secure a truce in Ukraine.
Outlook: A Pivotal Week
With Trump’s inauguration setting the stage for potential executive orders and policy shifts, global markets remain on edge. Investors are bracing for decisions that could reshape international trade, currency dynamics, and the broader economic landscape.
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