Dollar weakens ahead of Trump’s policies, MLK holiday

On Monday, the dollar weakened against major currencies as traders braced for a series of policy announcements following Donald Trump’s inauguration.

Dollar weakens ahead of Trump’s policies, MLK holiday

Markets are focusing on his proposals to raise tariffs, tighten immigration, lower taxes, and increase deregulation, all of which are expected to drive inflation. However, trading volumes are expected to remain light because the US market is closed for the Martin Luther King Jr. holiday. Last week, the dollar index ended a six-week winning streak after a surprise slowdown in US core inflation, combined with weaker-than-expected data on the producer price index and retail sales.

Fed cut speculation weakens dollar, NZD and AUD fall most

This prompted speculation that the Federal Reserve may cut interest rates further this year. Currently, markets are pricing in a total of 42 basis points of easing in 2025. The dollar experienced broad weakness, with the most notable declines against the New Zealand and Australian dollars.