Written by Tom Westbrook
SINGAPORE (Reuters) – The dollar was strong and Asian stock markets were upbeat on Monday as investors awaited a slew of policy announcements in Donald Trump’s first hours as president and watched for a rate hike in Japan later in the week. .
Trump takes the oath of office at noon Eastern Time (1700 GMT), and promised a “new day of American power” at a rally on Sunday.
He hoped to issue a number of higher orders and, in a reminder of his lack of confidence, launched a digital token on Friday, which rose to trade above $ 70 by one point with a total market value north of 15 billion.
Monday is a holiday in the US, so the first reactions to his inauguration in traditional financial markets may be heard in foreign exchanges, where traders are focused on Trump’s tariff policies, and in Asian exchanges on Tuesday.
U.S. stock futures were slightly weaker in early morning Asia on Monday while the dollar, which has rallied since September on strong U.S. data and as Trump’s successful political campaign gained momentum, held steady.
increased by 1%. ()
Last week saw the biggest weekly gain since early November and the biggest Nasdaq since early December with some inflation data.
The dollar is up about 14% against the euro since September and at $1.0273 is not far from last week’s two-year high. But so much is priced in that some analysts feel that a slow start to US tax hikes could be a drag on some retailers.
“A strong start to Trump’s new name could dampen sentiment and give the dollar more support,” said Corpay currency strategist Peter Dragicevich.
“On the contrary, based on what has already been baked in, we think that a moderate approach may ease fears and see the dollar lose strength, as happened after Trump took office in 2017.”
Trump has threatened tariffs of up to 10% on global imports and 60% on Chinese goods, as well as 25% import tariffs on Canadian and Mexican products, actions that trade experts say will boost trade flows, raise costs and retaliate.
The Canadian dollar touched a five-year low of C$1.4486 per dollar on Monday. The Mexican peso hit a 2-1/2-year low of 20.94 per dollar on Friday. [FRX/]
dipped earlier in the day in Asia but remained above $100,000. Benchmark 10-year Treasury yields closed Friday at 4.61%, up nearly 100 basis points in four months. [US/]
CHINA FOCUS
China is focused on targeting potentially onerous trade tariffs. Investors recently cheered better-than-expected Chinese growth data and Friday’s phone call between Trump and Chinese President Xi Jinping left both.
“Basically everyone is waiting for these trade talks to start and to see how Xi Jinping takes the attitude,” Ken Peng, head of Asia investment strategy at Citi Wealth told reporters in Singapore at a briefing.
“That relationship between the two gentlemen has become very important as a leading indicator of policies.”
China’s equity markets rose last week and futures pointed to a slight gain for Hong Kong shares on the open.
The yuan appeared unable to adjust slowly to any trade policy changes and strengthened slightly to 7.3355 per dollar in offshore trade.
The Australian dollar, sensitive to trade flows and China’s economy, has ended a five-year decline and, according to Commonwealth Bank strategist Joe Capurso, could test resistance at $0.6322 if Trump’s policy changes fall short of market expectations. ended at $0.62.
The Japanese yen rallied last week as comments from Bank of Japan policymakers were taken as indications of a possible rate cut on Friday.
It remained stable at 156.17 per dollar and the benchmark markets are pricing in an 80% 25 chance of a base rate hike.
In commodities, gold rose to $2,694 an ounce and futures rose to $81.21 a barrel.
