Dollar under water on signs Trump’s payments will be gradual By Reuters

Written by Wayne Cole

SYDNEY (Reuters) – The dollar suffered heavy losses on Tuesday after U.S. President Donald Trump held off on new tariffs and reports suggested any new tariffs would be ” limited”, which is a big relief for funds exposed to the trade.

Trump used his inaugural address to declare an emergency on immigration and an aggressive foreign policy, including a pledge to restore the Panama Canal.

However, there was only a brief mention of offers, so far, no details on how or when they might open.

“This does not mean that rates will not be set, but they are taken as a sign of a gradual and anti-universal decline,” said Taylor Nugent, chief economist at National Australia Bank (OTC:).

The market’s reaction was swift, with a 1.2% drop on Monday in the strongest daily loss since the end of 2023. The last index stood at 108.060, above support at around 107.70.

The euro rose to $1.0416, after gathering 1.4% overnight to try to resist at $1.0435. The EU has a large trade surplus with the United States and was seen as a major target for Trump’s tariffs.

Similarly, Trump had threatened China with tariffs of up to 60% so the absence of any hard numbers on Monday sent the dollar down 1.0% to 7.2642 yuan in the coastal trade.

The Australian and New Zealand dollars, both open countries that rely heavily on trade, saw gains of around 1.5%.

The dollar was better against the Japanese yen at 155.63, adding 0.4% overnight.

The yen made gains last week on growing expectations that the Bank of Japan will raise rates at its policy meeting this Friday.

There was little initial reaction in US stock markets, in part due to the Martin Luther King Jr. holiday. who feared a combination of tariffs, immigration restrictions and tax cuts could be at risk of reviving inflation.

Markets are still not buying for another rate cut from the Federal Reserve until June or July, and they have about 40 basis points of year-end easing.

Yields from 10-year Treasuries looked set to drop from 4.623% when trading in Tokyo resumed, with futures trading at 4.59%.

“There will be a lot of money for the market to dig into this week, but if the implementation of trade and immigration policy does not negatively disrupt supply chains and the labor force, financial markets can wipe out some of the recent inflation warning,” ANZ analysts wrote. in the book.

Trump’s support for cryptocurrencies helped bitcoin hit a record high on Monday at $109,071.86, before easing back to $103,791.