The US dollar declined against most major currencies as traders reduced popular bullish positions on the greenback a few hours before the second inauguration of US President-elect Donald Trump.
This was reported by Bloomberg, UNN.
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The Bloomberg Dollar Index is reported to be down 0.3% on Monday, as Trump's phone call with Chinese President Xi Jinping on Friday eased concerns about trade tensions between the two countries.
The liquidity shortage caused by the US inauguration probably contributed to the dollar's weakness against all currencies, from the Australian dollar to the offshore yuan and other currencies.
We're all waiting for the big event - Trump's speech and subsequent executive orders. Liquidity is tight and price signals should be taken with caution
According to the Commodity Futures Trading Commission, speculative currency traders increased their bets on the dollar to the highest levels since 2019.
After Trump's election victory, bets on the dollar's strengthening became one of the most popular trades on the market, which increases the risk of significant market fluctuations if such positions weaken.
The currencies of New Zealand and Australia, which are often seen as indicators of risk sentiment, rose against the US dollar on Monday. The won, South Korea's currency, which is also sensitive to global trade and growth, topped the Asian currency rankings.
Markets get a boost from an encouraging call between Trump and Xi. Markets seem to have high expectations for this week's policy announcements. The risk is that President Trump will not be able to deliver on his big promises, which will bring more relief to the markets
Recall
Donald Trump is planning to create a cryptocurrency advisory council at the beginning of his presidency. The new body will have up to 20 members and will assist the government in formulating favorable policies for the crypto market.
