Dollar drifts ahead of Trump's return to the White House
The spotlight is firmly on the policies Trump will enact on his first day in office. At a rally a day before, Trump said he would impose severe limits on immigration
The dollar was on the defensive at the start of a pivotal week on Monday as Donald Trump returns to the White House, with his inauguration speech later in the day the primary focus for investors hoping to decipher his immediate policies.
The Japanese yen strengthened in Asian hours, clinging to a one-month high hit last week, as traders wager the Bank of Japan will hike its policy interest rate this week. Still, trading is likely to be thin with US markets closed.
Investors are also keeping an eye on Middle East developments after Hamas released three Israeli hostages and Israel released 90 Palestinian prisoners on Sunday, the first day of a ceasefire suspending a 15-month-old war.
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Cryptocurrency investors remain in party mode awaiting executive orders from Trump aimed at reducing regulatory roadblocks and promoting widespread adoption of digital assets.
Trump courted crypto campaign cash promising to be a "crypto president" and launched a digital token on Friday, which soared above $70 at one point for a market value north of $15 billion. It was last trading around $42, CoinMarketCap showed.
Bitcoin, the world's best known cryptocurrency, was slightly weaker at $101,434 on Monday. It has surged 80% since the US election in early November touching record high in December.
The spotlight is firmly on the policies Trump will enact on his first day in office. At a rally a day before, Trump said he would impose severe limits on immigration.
Goldman Sachs strategists expect US policy changes to add to the case for dollar strength but cautioned of some near-term risks given the market's expectation for quick action on tariffs.
Instead, Goldman strategists anticipate a series of headline-grabbing news over time on tariffs, similar to Trump's first presidency. "We think the storm is just rolling in. We expect it will pay to be patient."
The dollar index , which measures the US currency against six peers, was 0.16% lower at 109.16 but remained close to the 26-month high of 110.17 touched last week.
The index has risen 4% since the election as traders expect Trump's policies to boost growth but be inflationary, requiring interest rates to stay higher for longer.
