Finance
Instant View: Dollar tumbles as Trump team signals no immediate tariffs
Published by Global Banking and Finance Review
Posted on January 20, 2025
3 min readLast updated: January 27, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on January 20, 2025
3 min readLast updated: January 27, 2026
The dollar fell as Trump's team indicated no immediate tariffs, easing market fears. Global currencies strengthened, and European stocks rallied.
LONDON (Reuters) - The dollar tumbled broadly on Monday after an official for incoming U.S. administration said President-elect Donald Trump would not impose new trade tariffs on his first day in office, alleviating some fears of an immediate blitz.
Trump, who takes office later in the day, has previously pledged tariffs of 10% on global imports, 60% on Chinese goods and a 25% import surcharge on Canadian and Mexican products, duties that may upend trade flows, raise costs and draw retaliation.
The Canadian dollar, the Mexican peso and the Chinese yuan all strengthened by 1-1.5%, while the euro rose 1.5%, set for its largest one-day rally against the dollar in well over a year.
European stock markets rallied.
COMMENTS:
FREDERIK DUCROZET, HEAD OF MACROECONOMIC RESEARCH, PICTET WEALTH MANAGEMENT, GENEVA:
"The market is very sensitive to this topic (tariffs)."
"In the last two weeks we have seen two conflicting views from the new administration - the hard-liners on tariffs and those who favour a more market-friendly approach."
"So, this perception that the door is open to negotiations is important. But it doesn't tell us where we will end and I will be waiting for details on the scope of tariffs, which sectors will be impacted."
"The fact that he might be choosing a gradual approach is an encouraging sign."
NICK REES, HEAD OF MACRO RESEARCH, MONEX EUROPE, LONDON:
"Markets seem to be taking comfort from a headline suggesting that day-one Trump tariffs are off the table. That said, we think this confidence might be a little misplaced. Broad based day-one tariffs were always unlikely, but more targeted import levies shortly after inauguration day are another question."
"On this point, we think a note that Trump will direct Federal agencies to evaluate U.S. trading relationships with China and America’s continental neighbours is interesting. The devil will be in the detail, and we are yet to see the memo, but we would not be surprised if markets ultimately unwind much of this latest move as the particulars become clearer in the coming hours and days."
KATHLEEN BROOKS, RESEARCH DIRECTOR, XTB:
"The impact will hinge on Trump’s rush to sign executive orders. There have been reports that Trump could sign up to 100 executive orders today, these could include deregulation for the energy and financial sector, including crypto. However, reports this afternoon, suggest that the president won’t implement a package of tariffs today, instead he is planning to sign a memo that will direct Federal agencies to evaluate U.S. trade relationships with China, Mexico and Canada, in particular."
"It will also direct the agencies to investigate other US trade deficits and unfair trading practices. Conspicuous by their absence are actual tariffs, which suggests that a programme of tariffs is still under debate by Trump and his team."
BORIS KOVACEVIC, GLOBAL MACRO STRATEGIST AT CONVERA:
"The euro moved strongly higher against the U.S. dollar today ($1.04) and is on track to record its best day of the year so far. The rise follows reports that President Trump will delay imposing new tariffs on his first day in office. This eased market concerns over trade tensions, sparking a risk-on sentiment that benefited the euro."
(Reporting by Harry Robertson, Dhara Ranasinghe, Karin Strohecker and Stefano Rebaudo; Compiled by Amanda Cooper; Editing by Dhara Ranasinghe)
The dollar tumbled broadly after an official from the incoming U.S. administration indicated that President-elect Donald Trump would not impose new trade tariffs on his first day in office.
The Canadian dollar, Mexican peso, and Chinese yuan all strengthened by 1-1.5%, while the euro rose 1.5%, marking its largest one-day rally against the dollar in over a year.
Experts suggest that the perception of a gradual approach to tariffs is encouraging, but details on the scope and sectors affected are still awaited.
Markets seem to be comforted by the headline that day-one tariffs are off the table, although some analysts believe this confidence may be misplaced.
Trump is expected to direct federal agencies to evaluate U.S. trading relationships with China and neighboring countries, focusing on trade deficits and unfair practices.
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