MARKET NEWS

By Adrian Kerr

The dollar fell against a basket of currencies, the yield on the 10-year Treasury eased and bitcoin pulled back from recent record highs in the wake of President Donald Trump's inaugural speech, with the absence of any immediate imposition of broad tariffs providing some relief to equities.

Market direction for some currencies was volatile, as investors adjusted their response to the new administration. Earlier, the dollar rose against the Canadian dollar and Mexican peso after President Trump said he would place 25% tariffs on imports from those countries on Feb. 1.

By early morning in Europe, however, the DXY U.S. dollar index was down 0.8% to 108.545. Still, "the U.S. dollar could see some swings before policy on trade is confirmed by the U.S. administration," Schroders said in a note. Market watchers expect the dollar to be supported in the long term by the Federal Reserve's cautious approach to cutting rates compared with other central banks.

U.S. Treasury yields fell in the absence of immediate, broad tariff announcements, with the 10-year recently down six basis points from Friday to 4.55%, after Monday's market holiday, according to LSEG.

Initial market reaction suggested that "considerable fear was embedded across the different asset classes," DBS Group Research senior rates strategist Eugene Leow said in a note. "Some of this fear has now been unwound."

Trump's series of executive orders didn't include immediate changes to U.S. trade policy and held off on unveiling "day-one" tariffs, suggesting a shift to bilateral negotiations, CIMB analyst Michelle Chia said in a note.

Bitcoin fell back from Monday's record highs on initial disappointment that President Trump didn't announce more plans to boost the crypto market at his inauguration, said CMC Markets' Jochen Stanzl in a note. However, it would only take "a positive word" from Trump and bitcoin could rise significantly again, he said. Bitcoin was last down 0.3% to $102,291, off the record high of $109,072.

Early in Europe, U.S. stock futures were up around 0.3%, while the Stoxx Europe 600 index started pretty much unchanged with slight falls in France's CAC 40 and Germany's DAX. The FTSE 100 added 0.1%.

Meanwhile, stock markets in Japan, China and Hong Kong ended mostly higher. The Shanghai Composite Index closed flat and the Shenzhen Composite Index rose 0.25%. Hong Kong's Hang Seng gained 0.9% and the Nikkei Stock Average rose 0.3%. South Korea's benchmark Kospi edged down 0.1%.

Elsewhere, benchmark crude oil prices fell on Trump's plans to boost U.S. oil-and-gas production, including rolling back Arctic drilling restrictions and lifting a freeze on liquefied natural gas export permitting. Brent crude was recently down 0.5% to $79.73 a barrel and WTI down 1.4% at $76.30 a barrel. In his speech, Trump declared a national energy emergency and said he intends to fill strategic reserves "right to the top."

Jessica Fleetham, Emese Bartha and Ronnie Harui contributed to this article.