Dollar Stabilizes Ahead of Trump's Inauguration

As Donald Trump prepares for his inauguration, the dollar remains near a two-year high, influenced by expectations of aggressive economic policies, including potential tariffs and tax cuts. Investors are particularly focused on Trump's inaugural speech for insights into his immediate policy intentions, which could impact the U.S. economy and global markets. The Japanese yen has shown strength amid speculation that the Bank of Japan will increase interest rates, while the Australian dollar faces pressure from concerns regarding trade tensions with China. Treasury yields have risen in anticipation of Trump's inflationary policies, but recent soft inflation data has led to speculation about possible interest rate cuts from the Federal Reserve later this year. Overall, market sentiment is cautious as traders await clarity on Trump's administration's actions and their potential economic implications. Analysts warn that if Trump's policies do not meet expectations, the dollar may see profit-taking in the following days.