The dollar fell yesterday as traders held out hope that President Trump might not take a tough stance on tariffs. His inaugural address and first orders were not very forceful on this issue, but later in the day he issued a warning here. This brings markets back to reality that things are not that simple when it comes to Trump. This has given the dollar strength today, with EUR/USD now down to a low of 1.0350.
EUR/USD hourly chart
Since yesterday's jump from 1.0320 to 1.0400, the pair has remained quite volatile within a small range. Keep that in mind as well, as options are now much closer to expiration.
But from a technical perspective, buyers still have the upper hand in the short term. But at the start of President Trump's term, even if the broader market is convinced that tariffs could spark trade tensions, it's not very convincing.
However, the bond market remains cautious, with yields falling since last week. The yield on the 10-year U.S. Treasury is currently 4.57%, up from 4.53% earlier in the day, although it is currently down 4 basis points on outstanding balances.
Elsewhere, USD/JPY is also currently up 0.1% at 155.70, while GBP/USD is down 0.6% on the day at 1.2250. USD/CAD is also up 0.8% to 1.4430, but at least it is well away from its previous high of 1.4515.
Despite stock prices remaining strong, ground prices remained low on the day, with AUD/USD currently down 0.6% at 0.6235.
