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The U.S. dollar was poised for its biggest decline since November 2023 as President Donald Trump pledged to enact drastic tariffs but did not announce specific trade restrictions.
THE dollar The index, a measure of the currency relative to six of its peers, fell as much as 1.3 percent late afternoon in New York, according to FactSet data.
Monday’s slide came as Asset in his inauguration speech, he declared “we will impose tariffs and taxes on foreign countries to enrich our citizens” – but stopped short of announcing further details of his plans.
Trump administration officials said Monday that the president intends to evaluate trade relations with Mexico, Canada and China, but indicated he would refrain from quickly imposing new tariffs. customs.
James Nelligan, a strategist at JPMorgan Chase, said “no tariff implementation immediately.” . . would be a short-term disappointment for the dollar and it is understandable that its sympathy has weakened.”
However, he added that there was still room for “potentially aggressive tariffs down the road, once federal agencies review trade relationships.”
Markets have been betting since early October that Trump’s proposed tariffs and tax cuts would fuel inflation, pushing the Federal Reserve to keep interest rates higher for longer.
The pound sterling, the euro, the Mexican peso and the Canadian dollar all jumped at least 1.1 percent each against the dollar on Monday.
“The dollar was very overbought and has been for weeks now. A correction was coming,” said Brad Bechtel, global head of foreign exchange at Jefferies.
Wall Street was closed on Monday. U.S. government bonds have been selling off recently, partly in anticipation of the inflationary impact of tariffs on the U.S. economy.
“The only thing the (currency) market was expecting was more volatility,” said Chris Turner, head of financial markets research at ING. “And we’re certainly seeing that.”
European equity markets closed in positive territory. The broad-based Stoxx Europe 600 index finished 0.1 percent higher, while the Frankfurt Dax rose 0.4 percent. London’s FTSE 100 index rose 0.2 percent, taking it to a new record high.
Oil prices were down after Trump declared a “energy emergency” in his inaugural address, with promises to open federal lands to oil exploration. Brent, the global benchmark, fell 0.9 percent to $80.03 a barrel, while WTI, its U.S. counterpart, fell 1.7 percent to $76.58 a barrel.