Asia Stock Markets Positive, Dollar Firm Ahead of Trump Inauguration
Singapore - Asia's stock markets opened cautiously positive on Monday as investors awaited a flurry of policy announcements from Donald Trump's second presidential term. The dollar remained firm amid expectations of a rate hike in Japan later this week.
U.S. Inauguration and Tariffs
Trump is to be sworn in at noon Eastern Time, with markets closely monitoring his tariff policies and potential impact on foreign exchange markets. Traders are anticipating initial responses in currency markets on Monday, followed by Asian trade on Tuesday due to the U.S. holiday.
U.S. Equity Futures and Dollar
U.S. equity futures were slightly weaker in Asian trading, while the dollar held steady after rallying since September on strong economic data and Trump's election campaign.
Japan's Nikkei Rises
Japan's Nikkei stock index gained 1%, extending a recent surge driven by a benign inflation report.
Euro vs. Dollar
The dollar remains up 14% against the euro since September, trading near a two-year high. However, analysts believe a more gradual approach to U.S. tariff hikes could potentially weaken the dollar.
Chinese Focus
China is a key focus due to the potential impact of Trump's trade levies. Investors were encouraged by a recent phone call between Trump and Chinese President Xi Jinping, but markets remain wary of potential trade negotiations.
Australian Dollar and Yuan
The Australian dollar, sensitive to trade flows and China's economy, has recovered slightly from five-year lows. The Chinese yuan is expected to adjust gradually to any trade policy changes.
Japanese Yen and Commodities
The Japanese yen strengthened last week on expectations of a rate hike on Friday. Gold and Brent crude oil futures traded higher.