Dollar Strong, Stocks Creep Higher as Second Trump Term Dawns

A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
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Dollar Strong, Stocks Creep Higher as Second Trump Term Dawns

A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo

The dollar was firm and Asia's stock markets were cautiously positive on Monday as investors waited for an expected flurry of policy announcements in the first hours of Donald Trump's second presidency and eyed a rate hike in Japan at the end of the week.
Trump takes the oath of office at noon Eastern Time (1700 GMT), and promised a "brand new day of American strength" at a rally on Sunday, Reuters said.
He has stoked expectations he will issue a slew of executive orders right away and, in a reminder of his unpredictability, launched a digital token on Friday, which soared to trade above $70 at one point for a total market value north of $15 billion.
Monday is a US holiday, so the first responses to his inauguration in traditional financial markets may be felt in foreign exchange, where traders are focused on Trump's tariff policies, and then in Asian trade on Tuesday.
US equity futures were a fraction weaker in the Asian morning on Monday while the dollar, which has rallied since September on strong US data and as Trump's ultimately successful political campaign gained momentum, held steady.
Japan's Nikkei rose 1%.
Last week the S&P 500 notched the biggest weekly percentage gain since early November and the Nasdaq its largest since early December on some benign inflation data.
The dollar is up around 8% on 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 a more gradual start to US tariff hikes may draw out some sellers.
"A forceful start to Trump's new term could rattle nerves and give the dollar more support," said Corpay currency strategist Peter Dragicevich.
"By contrast, based on what already looks baked in, we think a more measured approach may ease fears and see the dollar lose ground, as it did after Trump took charge in 2017."
Trump has threatened tariffs of as much as 10% on global imports and 60% on Chinese goods, plus a 25% import surcharge on Canadian and Mexican products, duties that trade experts say would upend trade flows, raise costs and draw retaliation.
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.
Bitcoin dipped in the early part of the Asian day but remained above $100,000. Benchmark 10-year Treasury yields closed out Friday at 4.61%, up nearly 100 basis points in four months.
CHINA FOCUS
China is in focus as the target of the harshest potential trade levies. Investors lately cheered better-than-expected Chinese growth data and a Friday phone call between Trump and Chinese President Xi Jinping that left both upbeat.
"Basically everyone is waiting for these trade negotiations to begin and see what kind of attitude Xi Jinping takes with Trump," Ken Peng, head of Asia investment strategy at Citi Wealth told reporters in Singapore at an outlook briefing.
"That relationship between the two gentlemen has become very important as a leading indicator of policies."
Chinese equity markets rose last week and futures pointed to modest gains for Hong Kong shares at the open.
The yuan is seen likely to slowly adjust to any shifts in trade policy and was marginally firmer at 7.3355 per dollar in offshore trade.
The Australian dollar, sensitive to trade flows and China's economy, has scraped off five-year lows and, according to Commonwealth Bank strategist Joe Capurso, could test resistance at $0.6322 if Trump's policy changes fall short of market expectations. It was last at $0.62.
Japan's yen rallied last week as remarks from Bank of Japan policymakers were taken as hints that a rate cut is likely on Friday.
It was last steady at 156.17 per dollar and rates markets priced about an 80% chance of a 25 basis point rate hike.
In commodities gold hovered at $2,694 an ounce and Brent crude futures ticked higher to $81.21 a barrel.



Gold Bounces Back on Softer Dollar, US-Iran Concerns; Silver Rebounds

Gold and silver bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, January 10, 2025. REUTERS/Angelika Warmuth
Gold and silver bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, January 10, 2025. REUTERS/Angelika Warmuth
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Gold Bounces Back on Softer Dollar, US-Iran Concerns; Silver Rebounds

Gold and silver bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, January 10, 2025. REUTERS/Angelika Warmuth
Gold and silver bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, January 10, 2025. REUTERS/Angelika Warmuth

Gold rebounded on Friday and was set for a weekly gain, helped by bargain hunting, a slightly weaker dollar and lingering concerns over US-Iran talks in Oman, while silver recovered from a 1-1/2-month low.

Spot gold rose 3.1% to $4,916.98 per ounce by 09:31 a.m. ET (1431 GMT), recouping losses posted during a volatile Asia session that followed a fall of 3.9% on Thursday. Bullion was headed for a weekly gain of about 1.3%.

US gold futures for April delivery gained 1% to $4,939.70 per ounce.

The US dollar index fell 0.3%, making greenback-priced bullion cheaper for the overseas buyers.

"The gold market is seeing perceived bargain hunting from bullish traders," said Jim Wyckoff, senior analyst at Kitco Metals.

Iran and the US started high-stakes negotiations via Omani mediation on Friday to try to overcome sharp differences over Tehran's nuclear program.

Wyckoff said gold's rebound lacks momentum and the metal is unlikely to break records without a major geopolitical trigger.

Gold, a traditional safe haven, does well in times of geopolitical and economic uncertainty.

Spot silver rose 5.3% to $74.98 an ounce after dipping below $65 earlier, but was still headed for its biggest weekly drop since 2011, down over 10.6%, following steep losses last week as well.

"What we're seeing in silver is huge speculation on the long side," said Wyckoff, adding that after years in a boom cycle, gold and silver now appear to be entering a typical commodity bust phase.

CME Group raised margin requirements for gold and silver futures for a third time in two weeks on Thursday to curb risks from heightened market volatility.

Spot platinum added 3.2% to $2,052 per ounce, while palladium gained 4.9% to $1,695.18. Both were down for the week.


Europe, Türkiye Agree to Work Toward Updating Customs Union

European Union (R) and Turkish flags fly at the business and financial district of Levent in Istanbul, Türkiye September 4, 2017. REUTERS/Osman Orsal
European Union (R) and Turkish flags fly at the business and financial district of Levent in Istanbul, Türkiye September 4, 2017. REUTERS/Osman Orsal
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Europe, Türkiye Agree to Work Toward Updating Customs Union

European Union (R) and Turkish flags fly at the business and financial district of Levent in Istanbul, Türkiye September 4, 2017. REUTERS/Osman Orsal
European Union (R) and Turkish flags fly at the business and financial district of Levent in Istanbul, Türkiye September 4, 2017. REUTERS/Osman Orsal

The European enlargement chief and the Turkish foreign minister said on Friday they had agreed to continue work toward modernizing the EU-Türkiye customs union and to improve its implementation, Reuters reported.

European Commissioner for Enlargement Marta Kos met Turkish Foreign Minister Hakan Fidan in the capital Ankara on Friday.

"They shared a willingness to work for paving the way for the modernization of the Customs Union and to achieve its full potential in order to support competitiveness, and economic security and resilience for both sides," they said in a joint statement afterward.

The sides also welcomed the gradual resumption of European Investment Bank (EIB) operations in Türkiye and said they intended to support projects across the country and neighbouring regions in cooperation with the bank.


Bitcoin Falls 8% and Asian Shares Mostly Slip after Wall Street is Hit by Tech Stock Losses

FILE PHOTO: Representation of Bitcoin cryptocurrency in this illustration taken September 10, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Representation of Bitcoin cryptocurrency in this illustration taken September 10, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
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Bitcoin Falls 8% and Asian Shares Mostly Slip after Wall Street is Hit by Tech Stock Losses

FILE PHOTO: Representation of Bitcoin cryptocurrency in this illustration taken September 10, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Representation of Bitcoin cryptocurrency in this illustration taken September 10, 2025. REUTERS/Dado Ruvic/Illustration/File Photo

US futures and Asian shares traded mostly lower on Friday, tracking Wall Street’s losses as technology stocks again dragged on markets.

Bitcoin sank to roughly half its record price, giving back all it gained since US President Donald Trump won the White House for his second term.

Tokyo’s Nikkei 225 was up 0.8% to 54,253.68, recovering from losses earlier this week, with technology-related stocks leading gains. SoftBank Group rose 2.2% and chipmaker Tokyo Electron rose 2.6%. Japan will also be holding its general election on Sunday, in which Prime Minister Sanae Takaichi expects to win a stronger public mandate for her policies.

Shares of Toyota Motor were up 2%. The carmaker said Friday its CEO Koji Sato will be stepping down in April, and is to be replaced by Chief Financial Officer Kenta Kon, The Associated Press said.

South Korea’s Kospi lost 1.4% to 5,089.14, weighed down by tech shares. Samsung Electronics, the country’s biggest listed company, fell 0.4%. Chipmaker SK Hynix was also down 0.4%.

Hong Kong’s Hang Seng fell 1.4% to 26,519.60. The Shanghai Composite index was down 0.3% to 4,065.58.

In Australia, the S&P/ASX 200 shed 2% to 8,708.80.

Taiwan’s Taiex was mostly flat. India's Sensex traded 0.1% lower.

Against the backdrop of the technology sell-off this week, bitcoin, the world’s largest cryptocurrency, saw dimming enthusiasm and was trading about 8% lower at just under $65,000 early Friday, after it briefly sank over 12% to below $64,000 on Thursday. That’s down from a record of above $124,000 in October.

The future for the S&P 500 was 0.2% lower, while that for the Dow Jones Industrial Average fell 0.1%.

On Thursday, the S&P 500 fell 1.2% to 6,798.40, its sixth loss in the seven days. The Dow Jones Industrial Average fell 1.2% to 48,908.72. The Nasdaq composite dropped 1.6% to 22,540.59.

Technology stocks were among the worst hit as concerns persist over whether massive AI investments by many of the Big Tech firms will pay off.

Chipmaker Qualcomm sank 8.5% despite better-than-expected quarterly revenues. Alphabet lost 0.5% as investors were focused on its huge spendings on AI.

Amazon fell 11% in after hours trading Thursday after it announced plans to boost capital spending by more than 50% to $200 billion in AI and other areas.

American artificial intelligence startup Anthropic ’s new AI tools also fueled the sell-off of software stocks on Wall Street this week, as its sophistication means many traditional software development services and products could be disrupted or replaced.

Gold and silver prices have been volatile this week following a monthslong rally as investors moved into safe haven assets prompted by factors including elevated geopolitical tensions. Gold prices fell 0.6% on Friday to $4,858.60 per ounce, after nearing $5,600 last week.

Silver prices dropped 5.5% to $72.52 per ounce after rising earlier this week. It lost more than 31% last Friday.

In other dealings early Friday, US benchmark crude oil gained 35 cents to $63.64 a barrel. Brent crude, the international standard, rose 36 cents to $67.91 a barrel.

The US dollar fell to 156.74 Japanese yen from 157.03 yen. The euro was trading at $1.1789, up from $1.1777.