London: As Donald Trump got ready to retake the presidency of the largest economy in the world, stock markets in Europe and Asia saw a surge Monday, and bitcoin reached a record high.
Following The Wall Street Journal’s story that Trump will not immediately apply tariffs upon his inauguration, the dollar fell more than 1% against the euro and similarly against the pound.
One euro now purchases $1.0419, a 1.4 percent decline in the value of the dollar relative to the European single currency. With the pound purchasing $1.2314, it fell 1.1 percent against sterling.
Additionally, oil prices dropped more than 1%.
A second Trump term might be less turbulent than his first, according to Kathleen Brooks, research director at XTB, who pointed out that “Treasury Secretary Scott Bessant has spoken out against tariffs and is said to be a moderating influence on the President.” According to Brooks, there are indications that “a program of tariffs is still under debate by Trump and his team,” despite predictions of an influx of executive orders. As Trump, who has indicated aspirations to deregulate the cryptocurrency industry, is ready to take office as US president, Bitcoin reached a record high of almost $109,000 before dropping.
Trump introduced his own cryptocurrency over the weekend, which he dubbed a “meme coin” and was aptly named $TRUMP. This sparked frantic buying, which caused the market capitalization to jump to several billion dollars.
Russ Mould, investment director at AJ Bell, observed that on the day when Donald Trump returns to the White House, “markets are beating to his drum.”
For the first time, Frankfurt’s blue-chip DAX surged above 21,000 points.
According to Jochen Stanzl, Chief Market Analyst at CMC Markets, “the German leading index has been the secret star among global stock indices in the new year,” despite a pessimistic German economic outlook.
The benchmark FTSE 100 index in London was also trading at all-time highs.
On Monday, US market futures were firmly up despite Wall Street being closed for the Martin Luther King holiday.
Positive discussions between Trump and Chinese President Xi Jinping have bolstered sentiment ahead of the inauguration by allaying concerns about the upcoming US leader’s second term.
Fears of another crippling trade war between the US and China, the second-largest economy in the world, have been heightened by Trump’s announcements that he will slap high tariffs on imports.
The Federal Reserve may be forced to postpone further interest rate cuts as a result of pledges to reduce taxes, regulations, and immigration, with some analysts even raising the possibility of rises.
According to Charu Chanana, chief investment strategist at Saxo Markets, “the beginning of a new presidency often brings fresh energy — and uncertainty — to the financial markets.”
Following Donald Trump’s inauguration, markets are anticipating big changes in policy. This can entail adjustments to trade agreements, taxes, and spending. Amid optimism that the feared trade war can be avoided, Hong Kong’s stock market led gains around Asia.
Seoul fell after the Bank of Korea lowered its prediction for economic growth in 2025 due to waning optimism and political uncertainties after President Yoon Suk Yeol briefly imposed martial law last month and the ensuing political crisis.
The announcement of a $250 billion aid package for its exporters by the South Korean central bank, which cited the possibility of Trump tariffs, did little to alleviate the situation.