Gold retreats as investors liquidate positions in equities sell-off

Gold prices declined more than 1% on Monday, retreating from near-record highs seen in the last session, as investors liquidated bullion positions, along with a broader market sell-off sparked by rising interest in Chinese AI start-up DeepSeek.

Spot gold was down 1.3% at USD 2,736.75 per ounce as of 01:49 p.m. ET (1849 GMT). Prices had risen to near-record high levels on Friday. US gold futures GCcv1 settled 1.5% lower at USD 2,738.40 per ounce.

The sharp declines in global equity markets have driven risk-averse moves across other asset classes, with US Treasury yields dropping to three-week lows and the dollar index hitting its lowest levels since Dec. 18.

“This (sell-off) is very much driven by the broad equity market rather than just the normal interest rates or currency. We’re seeing a bit of a liquidity crunch,” said Bart Melek, head of commodity strategies at TD Securities.

“Some people need to maybe create liquidity in the market and maybe some of the stocks that they were leveraged on or had margin against had a big move, so I think it’s a liquidity issue and gold is being sold along with other risk assets.”

The sell-off came ahead of the US Federal Reserve’s first policy meeting of the year, where policymakers are largely expected to keep interest rates steady on Wednesday, according to the CME FedWatch tool.

However, investor focus will be on any cues regarding future policy decisions as US President Donald Trump begins his second term, with his tariff policies likely to fuel inflation.

“Gold remains fairly well bid. Safe haven demand is going to continue to support… We will ultimately break out to new all-time highs as there’s ongoing uncertainty about the Trump administration’s policy agenda,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Spot silver fell 1.7% to USD 30.10 per ounce, after logging a 0.9% increase last week.

Palladium dipped 2.9% to USD 959 per ounce and platinum fell 0.3% to USD 945.80 per ounce.

(Reporting by Anmol Choubey and Anjana Anil in Bengaluru, additional reporting by Swati Verma; Editing by Shreya Biswas)

China’s AI neophyte rocks Wall St ahead of Fed, mega-tech earnings

The US tech juggernaut suffered a sharp setback on Monday, setting global markets up for a volatile ride this week, with mega-cap earnings on deck, the Fed’s meeting, and lingering uncertainty over US President Donald Trump’s trade policies.

US stocks tumbled on Monday, led by tech shares, as the growing buzz around Chinese startup DeepSeek’s low-cost AI model sparked concerns about the sector’s high valuations.

Selling on Asian exchanges outside China spilled over into US stock futures. The S&P 500 dropped about 1.5% after hitting an all-time high last week and the Nasdaq swooned more than 3%, while Nvidia, whose chips are the top choice for powering AI applications, dropped about 17%.

Investors meanwhile flocked to US Treasuries in a flight to safety, pushing benchmark 10-year yields down 10 basis points to 4.53%. The dollar index fell 0.1% to its lowest since Dec. 18.

Foreign competition to the US dominance in artificial intelligence has sparked broader concerns over valuations in US equities, where Big Tech shares have led stocks higher over the past couple of years.

This means all eyes will be on a wave of earnings reports this week, with megacap tech giants Tesla, Meta, Microsoft, and Apple set to take center stage. Investors will be hunting for clues on when the hefty bets on artificial intelligence will begin to pay off in a meaningful way.

Meanwhile US trade policies remain a key market theme.

China, Mexico, and Canada remain on edge as Trump last week marked Feb. 1 as the date for imposing additional tariffs on the major US trading partners.

And while so far he has refrained from implementing broad trade levies, on Sunday Trump threatened Colombia with tariffs and sanctions to punish it for refusing to accept military flights carrying deportees. Colombia later said it would accept the military aircraft and the US sanctions threat was put on hold, but investors got a taste of how Trump’s trade decisions could surprise markets.

Later this week, the Fed’s first meeting of 2025 will be a major focus for investors trying to decipher how Trump’s economic policies will impact the US central bank’s views on growth and inflation.

US policymakers are expected to leave interest rates unchanged at their rate-setting meeting, which starts on Tuesday and ends on Wednesday, but Trump may complicate the Fed’s job going forward, after he said last week he wants the Fed to lower borrowing costs.

The European Central Bank meanwhile will meet on Thursday for the first time since Trump returned to office. It is largely expected to cut the key deposit rate by another 25 basis points, but investors will look for hints on the path ahead as the threat of US tariffs clouds the European economic outlook.

The economic data calendar in Asia is light on Tuesday, and many bourses have extended holidays this week for the Lunar New Year. Markets in mainland China are shut from Tuesday and do not reopen until Feb. 5, while Singapore’s financial markets will be closed for a half day on Tuesday and closed for all of Wednesday and Thursday, for national holidays.

Here are key developments that could provide more direction to markets on Tuesday:

– Japan service PPI (Dec)

– Australia Business Confidence Index

– US durable goods (Dec)

– US 7-year Treasury auction

(Reporting by Davide Barbuscia; Editing by Alden Bentley and Deepa Babington)

BUZZ-COMMENT-US recap: Dollar mixed as risk aversion slams tech

Jan 27 (Reuters) – The dollar index fell with Treasury yields on Monday as concerns about China challenging U.S. AI dominance weighed on technology stocks.

The yen and Swiss franc held earlier gains as havens to the tech market sell off.

Chinese startup DeepSeek, the company threatening U.S. rivals with a low cost AI model, said it will temporarily limit registrations due to a cyberattack.

Risk aversion and a strong 5-year auction sent U.S. Treasury yields lower though U.S. new homes sales exceeded expectations and the Dallas Fed manufacturing index improved in January.

Focus midweek is on tech earnings, Q4 GDP, and the outcome of Wednesday’s Fed policy meeting. The U.S. central bank is seen holding it policy rate steady at 4.25%-4.5%.

EUR/USD pared gains after rising above its 20-day upper Bollinger to a 1-1/2-month high of 1.0535. The European Central Bank is expected to lower its policy rate by 25 basis points on Thursday, potentially hampering bullish momentum. A rise above 1.06 is considered bullish with nearby support seen at 1.0450.

GBP/USD was little changed on the session. A dearth if U.K. data this week will likely see the pair move according to month-end flows and U.S. risks. British Prime Minister Keir Starmer and U.S. President Donald Trump agreed to meet soon after a cordial call on Sunday.

USD/JPY steadied above its daily cloud top at 153.88 as downward momentum stalled and a spike in yen volatility abated. The pair needs to eclipse its 55-DMA at 154.97 to neutralize bears. Japan will eye services PPI on Tuesday.

Treasury yields fell 7 to 10 basis points. The 2s-10s curve was down about 1 basis point to +33.7bp.

The S&P 500 slid 1.8% fueled by falling tech shares.

Oil fell about 2.3% pressured by demand worries amid sliding equity prices.

Gold fell 1.2% while copper slid 2.5% as weak China manufacturing data sparked demand worries ahead of the Lunar New Year holiday.

Heading toward the close: EUR/USD -0.08%, USD/JPY -1.04%, GBP/USD +0.05%, AUD/USD -0.49%, DXY -0.04%, EUR/JPY -1.07%, GBP/JPY -1.00%, AUD/JPY -1.48%.

For more click on FXBUZ

(Editing by Burton Frierson
Reporting by Robert Fullem)

((robert.fullem@thomsonreuters.com;))

Global equity funds gain inflows on Fed rate cut hopes, Trump’s AI plans

Global equity funds gained a fourth weekly inflow in five weeks in the week through Jan. 22 spurred by optimism for US Federal Reserve rate cuts following cooling inflation and President Donald Trump’s plans for extensive AI infrastructure spending.

According to LSEG Lipper data, global equity funds attracted a net USD 7.42 billion worth of inflows during the weeks after having lost about USD 4.3 billion in outflows in the prior week.

The MSCI World index has rallied nearly 5%, since the announcement of the inflation report on Jan. 15, while Europe’s continent-wide STOXX 600 index hit a record high of 530.55 on Wednesday.

By region, investors snapped up a massive USD 6.69 billion worth of European equity funds. They also acquired Asian funds to the tune of USD 2.84 billion but ditched US funds worth USD 3.2 billion on a net basis.

Sectoral funds were popular as these funds garnered a net USD 4.86 billion worth of inflows, the largest since Nov. 13, 2024. Tech, financials and industrials attracted a notable USD 1.86 billion, USD 1.38 billion and USD 1.33 billion, respectively in inflows.

Global bond funds drew a net USD 14.27 billion for a fourth consecutive week of net purchases.

The high yields segment was particularly in demand as it attracted USD 2.72 billion, the largest amount in 10 weeks. Loan participation funds and government bond funds also racked up a significant USD 2.13 billion and USD 1.95 billion worth of inflows, respectively.

Meanwhile, money market funds saw USD 44.13 billion worth of inflows, contrasting a net USD 94.14 billion worth of weekly sales, the previous week.

Among commodities, investors pulled USD 540 million from precious metal funds, posting a third weekly outflow in four weeks. Energy funds also saw a net USD 456 million worth of sales for a seventh consecutive week of outflows.

Data covering 29,630 emerging market funds revealed that equity funds had their 11th successive weekly outflow to the tune of USD 1.95 billion. Bond funds, however, received inflows for a third straight week, worth about USD 517 million on a net basis.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Toby Chopra)

Dollar on track for worst week since November 2023

NEW YORK – The dollar fell on Friday and was on track for its worst week in more than a year on expectations that tariffs enacted by US President Donald Trump will be lower than previously feared and unlikely to spur an international trade war.

The prospect of high tariffs on goods from countries including China, Canada, Mexico, and the eurozone has raised concerns about a renewed bout of inflation, which has helped to send Treasury yields and the US dollar higher in recent months.

But that move partially reversed this week as traders bet that tariffs may not be as large or as widespread as previously feared. Trump said on Thursday that his conversation with Chinese President Xi Jinping last week was friendly and he thought he could reach a trade deal with China.

“People are less and less convinced that the tariffs are coming,” said Adam Button, chief currency analyst at ForexLive in Toronto.

The dollar index was last down 0.64% at 107.45. It reached 110.17 on Jan. 13, the highest since November 2022. It is on track to lose 1.79% this week, the biggest weekly fall since November 2023.

The Chinese yuan also got a lift on the back of Trump’s remarks, with the onshore unit rising to its strongest level in eight weeks at 7.2363 per dollar.

Trump also said on Thursday that he wants the Federal Reserve to cut interest rates, before the US central bank is due to meet next week.

The Fed is expected to keep rates unchanged when it concludes its two-day meeting on Wednesday, though investors will be watching for any clues that a rate cut could come in March if inflation continues to ease closer to the US central bank’s 2% annual target.

Data on Friday showed that US business activity slowed to a ninth-month low in January amid rising price pressures, while separately US existing home sales increased to a 10-month high in December.

US consumer sentiment also weakened in January for the first time in six months amid worries about the labor market and potential higher prices for goods if Trump’s new administration presses ahead with planned tariffs on imports.

Some of the retrace in the greenback this week was likely due to technical reasons, after its 10% rise since the end of September, said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

“A lot of good news for the US is priced in,” Chandler said. A test for dollar strength may come next week if the Fed holds rates steady and the European Central Bank, Bank of Canada and Swedish Riksbank all cut rates, he added.

The euro rose 0.76% to USD 1.0494. It is on pace for a 2.18% weekly gain, its best week since July 2023.

The single currency was boosted by a survey showing that euro zone business began the new year with a modest return to growth as stable services activity in January was complemented by an easing of the long-running downturn in manufacturing.

The yen was up slightly in choppy trading after the Bank of Japan raised interest rates on Friday to their highest since the 2008 global financial crisis and revised up its inflation forecasts.

BOJ Governor Kazuo Ueda said the central bank will keep raising interest rates as wage and price increases broaden but offered few clues on the timing and pace of future rate hikes.

The dollar was last down 0.11% on the day at 155.88 yen.

Sterling advanced 1.04% to USD 1.2479 and was poised for a rise of 2.58% for the week, following three straight weeks of losses.

In cryptocurrencies, bitcoin gained 2.94% to USD 106,159.29.

Trump on Thursday ordered the creation of a cryptocurrency working group tasked with proposing new digital asset regulations and exploring the creation of a national cryptocurrency stockpile, making good on his promise to quickly overhaul US crypto policy.

(Reporting by Karen Brettell in New York; Additional reporting by Rae Wee in Singapore and Greta Rosen Fondahn in Gdansk; Editing by Toby Chopra and Diane Craft)

Oil prices settle pennies higher, down for week as Trump touts energy policy

HOUSTON – Oil prices settled slightly higher on Friday but posted a weekly decline, ending four straight weeks of gains, after US President Donald Trump announced sweeping plans to boost domestic production while demanding that OPEC move to lower crude prices.

Brent crude futures settled up 21 cents, or 0.27%, to USD 78.50 a barrel. US West Texas Intermediate crude (WTI) settled up 4 cents, or 0.05%, to USD 74.66.

Brent has lost 2.8% this week while WTI was down 4.1%.

Trump on Friday reiterated his call for the Organization of the Petroleum Exporting Countries to cut oil prices to hurt oil-rich Russia’s finances and help bring an end to the war in Ukraine.

“One way to stop it quickly is for OPEC to stop making so much money and drop the price of oil … that war will stop right away,” Trump said as he landed in North Carolina to view storm damage.

The threat of harsh US sanctions on Russia and Iran, which are key oil producers, could undermine Trump’s goal of lowering energy costs, StoneX analyst Alex Hodes said in a note on Friday.

“Trump knows this and has leaned on OPEC to cover the void that these will create,” Hodes said.

On Thursday, Trump told the World Economic Forum he would demand that OPEC and its de facto leader, Saudi Arabia, bring down crude prices.

OPEC+, which includes Russia, has yet to react, with delegates from the group pointing to a plan already in place to start raising oil output from April.

“I don’t really expect OPEC will change policy unless there is a change in fundamentals,” UBS commodities analyst Giovanni Staunovo said. “Markets will be relatively muted until we get more clarity on sanctions policy and tariffs.”

TARIFFS

Chevron said on Friday it had started production at a USD 48 billion expansion of the giant Tengiz oilfield, which will bring its output to around 1% of global crude supply, and could further pressure OPEC’s efforts in the last few years to limit production.

Trump declared a national energy emergency on Monday, rolling back environmental restrictions on energy infrastructure as part of his plans to maximize domestic oil and gas production.

These rollbacks could support oil demand but have the potential to exacerbate oversupply, said Nikos Tzabouras, senior market specialist at trading platform Tradu.

Trump’s policies so far have largely followed predictions on the supply side, including cutting red tape to promote domestic supply growth, according to StoneX’s Hodes. However “the lower hanging fruit for growth has already been picked.”

The US president vowed on Wednesday to hit the European Union with tariffs and impose 25% tariffs on Canada and Mexico. He also said his administration was considering a 10% punitive duty on China.

As attention shifts to a possible February timeline for new tariffs, caution is likely to persist in the market, given potential negative implications for global growth and oil demand prospects, said Yeap Jun Rong, a market strategist at IG. Traders expect oil prices to range between USD 76.50 and USD 78 a barrel, he added.

While bullish catalysts such as a significant drawdown in US crude stocks are providing temporary positive swings, an over-supplied global market and projections of ailing Chinese demand continue to weigh on crude futures, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.

US crude inventories last week hit their lowest level since March 2022, the US Energy Information Administration said.

(Reporting by Georgina McCartney in Houston, Nandita Bose in Asheville, North Carolina, Anna Hirtenstein; additional reporting by Laila Kearney, Gabrielle Ng, and Paul Carsten; Editing by David Goodman, Louise Heavens, David Evans, Paul Simao, and David Gregorio)

Fed’s rate-cut view set to test resurgent US stocks rally

NEW YORK – The Federal Reserve’s first meeting of 2025 stands to test the resurgence in US stocks as investors gauge the extent of more equity-friendly interest rate cuts in the months ahead.

Stocks swooned after the Fed’s last meeting in December, when the central bank downgraded its forecast for rate cuts as it braced for firmer inflation this year.

Since then, monthly data that showed underlying inflation moderated set off relief on Wall Street, helping drive a rebound in stocks with the benchmark S&P 500 hitting a record high this week.

The Fed is broadly expected to pause its easing cycle when it gives its monetary policy statement on Wednesday, with investors instead focused on “what would need to happen for them to start talking about resuming the rate cuts,” said Angelo Kourkafas, senior investment strategist at Edward Jones.

Given recent data indicating strong economic activity, Kourkafas said, “there’s wide expectations that the Fed has no urgency to continue cutting until we get potentially more encouraging inflation data.”

The Fed’s benchmark rate stands at 4.25% to 4.5% after the central bank lowered it by a full percentage point last year. The Fed’s easing cycle began after rate hikes had helped bring down inflation from 40-year highs, although it remains above the Fed’s 2% annual target.

Fed funds futures are pricing in about 40 basis points more of easing — or nearly two more cuts — by December, according to LSEG data.

Morgan Stanley economists expect Fed Chair Jerome Powell will keep the possibility of a cut at the Fed’s March meeting “on the table.”

“If we are right in our assessment of the incoming data flow, then we think the Fed can stay on hold in January and retain its easing bias,” the Morgan Stanley economists said in a note.

Meanwhile, President Donald Trump said on Thursday he wants the Fed to cut rates, even as the central bank is expected to pause for an uncertain duration.

Stocks have started the year strongly, with the S&P 500 up about 4% so far in January, following back-to-back years of gains of over 20%.

Investors this week digested a flood of activity by Trump after his second term began on Monday, including his announcement of private sector investment in artificial intelligence infrastructure that propelled a broad tech stock rally.

Some investors were surprised that Trump has not yet moved to enact new tariffs on foreign imports, a key part of his expected agenda that could set off broad market volatility. The president, however, is threatening an array of tariffs, which continues to keep investors on edge about the potential to increase inflation.

With the Fed meeting for the first time since Trump’s presidency, the possibility of tariffs could factor into the central bank’s outlook, said Larry Werther, chief US economist of Daiwa Capital Markets America.

“If there’s any hint that the Fed is perhaps taking a more solid view on tariffs… and it’s unfavorable how they’re viewing it with respect to potential inflationary pressures, I think it could potentially be a negative for equities,” Werther said.

Stocks will also take their cues in the coming week from a slew of earnings results, especially from megacap tech companies. Reports are due from Apple, Microsoft, Facebook owner Meta Platforms, and Tesla — four of the “Magnificent Seven” companies whose shares have led equity indexes higher over the past two years.

The Magnificent Seven in general have put up stronger earnings growth than the rest of the S&P 500, but their valuations are also higher. The group trades at an average forward price-to-earnings ratio of 43 times expected 12-month earnings, and a median of 31.5 times, compared to 22 times for the S&P 500, according to LSEG data.

“If we start to see the Mag 7 struggle to meet some of these lofty expectations, we wouldn’t be surprised to see if the valuations take a meaningful hit,” said Michael Reynolds, vice president of investment strategy at Glenmede.

(Reporting by Lewis Krauskopf; Editing by David Gregorio)

European earnings may keep the mood sweet as tariff fears grow

LONDON – European companies are set to deliver a third straight quarter of profit growth, which may help to maintain newfound investor enthusiasm for the region despite political and economic turmoil and concerns over US President Donald Trump’s tariffs threat.

European stocks are trading at record highs, having outperformed Wall Street in the opening weeks of 2025, yet valuations are still rock bottom in comparison.

Investor cash has poured into the European market at the second-fastest pace in 25 years in January, according to Bank of America, even before Trump assumed the presidency and the first European company earnings began to trickle in.

Analysts are cautious, having chopped their estimates for fourth-quarter earnings growth to 1.5% from the previous year – or 4.9% excluding energy – down from an estimated 2.5% just two weeks ago, according to data from LSEG.

This would still mark the third consecutive quarter of expansion with forecasts showing both profit and sales growth for the first time since the first quarter of 2023.

“There is a high chance that if companies exceed expectations during the reporting season, share prices could rise. The potential for upside is greater than the downside,” said Matthieu Dulguerov, head of equities at REYL Intesa Sanpaolo.

However, with Trump threatening to impose tariffs on European Union imports, and political and economic uncertainty wracking the euro zone’s growth engines – France and Germany – the mood is tense.

“We think European management teams will err on the side of caution and give wide ranges considering the uncertainty and previous difficult years in Europe,” said Bernie Ahkong, CIO Global Multi-Strategy Alpha at UBS O’Connor. He cited the uncertainty around the new US administration, the Chinese economy, a key market for European exporters, and geopolitics.

Luxury bellwether LVMH reports on Tuesday, Dutch computer chip equipment maker ASML on Wednesday, and Deutsche Bank the following day. Danish drugmaker Novo Nordisk reports the week after.

LOWER BAR, EASIER BEATS

It’s early days for earnings, but already, Swiss luxury giant Richemont’s shares recorded their biggest daily rise in 16 years on Jan. 16 after fourth-quarter sales smashed expectations.

The latest surveys of business activity show the euro zone’s three largest economies – Germany, France and Italy – are stuck in an industrial recession, lagging global surveys, which have been driven by a strong US economy, thereby cushioning European earnings.

Another factor that has given European stocks a tailwind is the euro, which has lost some 4.5% in the last year.

“Many believe Europe is facing economic challenges and will have lower growth compared to the US However, most European companies are not heavily reliant on European economic growth as they operate globally,” said Dulguerov.

Goldman Sachs strategists estimate that 60% of European company revenues come from outside Europe.

European shares are trading near their largest discount on record to the S&P 500 index, at a forward price-to-earnings ratio of around 13.3, compared with 21.6 for US stocks, according to LSEG Datastream.

Many of these factors are already baked into investors’ assumptions, and for Ahkong, the commentary around full-year guidance will be key for his team taking a strong view on specific sectors.

Investors will be poring over company announcements for any clarity on the impact of Trump’s policies on results.

On Monday, Lanxess shares jumped 5.1% after the German specialty chemicals maker said it expected its fourth-quarter core profit to exceed market expectations by more than 20%, largely due to pre-buying by US customers ahead of Trump’s Jan. 20 inauguration, given his threats on tariffs.

(Reporting by Lucy Raitano; Editing by Amanda Cooper and Emelia Sithole-Matarise)

Japan’s Nikkei tracks Wall Street higher as BOJ decision looms

TOKYO – Japan’s Nikkei share average rose in early trading on Friday, buoyed by a record close for US stocks overnight.

Gains came despite a widely expected interest rate hike by the Bank of Japan later in the day.

The Nikkei added 0.3% to 40,076.88 as of 0014 GMT, with 159 of the index’s 225 components rising, versus 64 that fell and two that were flat.

The broader Topix advanced 0.2%.

On Thursday, the US S&P 500 climbed 0.5% to mark its first closing record since Dec. 6.

There is not a set time for the BOJ decision, but it tends to come after 0230 GMT, which is when Japanese markets close for the midday recess.

“The BOJ has gone to pains to guide the market towards this hike and has expressly said it wouldn’t do it if the markets were volatile at the time of the meeting,” said Kyle Rodda, senior financial market analyst at Capital.com.

“It’s very unlikely the BOJ would pull the rug from underneath the market, considering all the conditions have been met for the central bank to hike.”

(Reporting by Kevin Buckland; Editing by Alan Barona)

Dollar dips after Trump comments as markets eye tariffs, central banks

NEW YORK – The dollar was modestly lower on Thursday in a choppy session, after comments from US President Donald Trump called for lower interest rates while providing no clarity on tariffs, and investors awaited a round of policy announcements from global central banks.

The dollar is down more than 1% on the week, largely due to a sharp drop on Monday as widely expected tariff announcements from Trump failed to materialize after his inauguration. The dollar has moved only slightly in the sessions since.

The greenback swung between gains and losses on the day as Trump demanded the world drop interest rates in a speech to global business and political leaders in Davos, Switzerland. He also warned they will face tariffs should they make their products anywhere but the US

Despite frequently mentioning tariffs, Trump again declined to give specifics of any duties he intends to put in place.

“We don’t have any truly certain information to go off of, so until we have a definitive answer, we’ll continue to see a little more volatility,” said David Eng, Investment Adviser at Sonora Wealth Group in Vancouver.

“It seems like the markets are more concerned about rate cuts and any kind of greater indicator that there’ll be more rate cuts.”

Investors are awaiting a host of policy decisions from global central banks over the next week, with the Bank of Japan widely expected to raise interest rates at the end of a two-day meeting on Friday.

Rate decisions from the US Federal Reserve and European Central Bank (ECB) are scheduled for Wednesday and Thursday of next week, respectively.

Markets are pricing in a nearly 96% chance the ECB will cut rates at its meeting, with recent comments from the central bank’s policymakers indicating a cut was likely.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, shed 0.19% to 108.06, with the euro up 0.14% at USD 1.0422.

The greenback tumbled 1.2% on Monday in its steepest one-day slide since November 2023, as Trump’s first day in office came with a slew of executive orders but no tariffs.

The dollar had climbed to a more than two-year high of 110.17 on Jan. 13 on a resilient US economy and expectations of widespread US tariffs, which could weigh on the currencies of other countries.

Data on Thursday showed new applications for US unemployment benefits rose marginally last week, suggesting that solid job growth likely continued in January.

Trump said this week that his administration was looking into imposing a 10% tariff on goods imported from China on Feb. 1, after he earlier said Mexico and Canada could face levies of around 25% by that date. He also promised duties on European imports, without providing details.

On Monday Trump signed a trade memo ordering federal agencies to review a range of trade issues by April 1, which many market participants believe will be a key date in revealing tariff plans.

Sterling strengthened 0.31% to USD 1.2354. The Mexican peso strengthened 0.92% versus the dollar to 20.329.

The Canadian dollar gained 0.16% to C$ 1.435 per dollar. Canada’s central bank is largely expected to cut rates at its policy meeting next week after inflation data earlier this week came in below its target rate of 2%.

The Japanese yen firmed 0.33% against the greenback to 155.99. The dollar edged up 0.06% to 7.282 versus the offshore Chinese yuan.

China announced plans on Thursday to channel hundreds of billions of yuan of investment from state-owned insurers into shares.

(Reporting by Chuck Mikolajczak; Editing by Mark Heinrich and Nia Williams)

2024 Mid-Year Economic Briefing: Navigating the Easing Cycle

Investing with Love: A Mother’s Guide to Putting Money to Work

Investor Series: An Introduction to Estate Planning

Quarterly Economic Growth Release: 5.4% Q12025

Policy rate views: Uncertainty stalls cuts