tradingkey.logo

LIVE MARKETS-Inflation risks may keep Trump from trying to devalue US dollar

ReutersJan 22, 2025 5:03 PM

Main U.S. indexes green; Nasdaq out front, up ~1.5%

S&P 500 hits record high

Euro STOXX 600 index up ~0.4%

Dollar, crude ~flat; gold gains; bitcoin down >2.5%

U.S. 10-Year Treasury yield rises to ~4.61%

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

INFLATION RISKS MAY KEEP TRUMP FROM TRYING TO DEVALUE U.S. DOLLAR

U.S. President Donald Trump’s new term has launched speculation on whether he will act to weaken the U.S. currency as he seeks to rebalance trade relationships and potentially raise tariffs on countries including China.

Brad Bechtel, global head of FX at Jefferies, says this is unlikely, as it would risk bringing higher inflation.

“I don't really see him doing anything that's going to proactively try to weaken the dollar,” Bechtel said. “A weaker dollar would obviously ignite inflation pressure here in the States and he was elected on an inflation mandate.”

Intervention from other nations to shore up their currencies, meanwhile, could become more common as they grapple with a stronger dollar.

Indonesia’s chief economic minister said on Tuesday it will require natural resource exporters to hold all proceeds onshore for at least one year, a move that could boost the country's foreign exchange reserves by $90 billion a year and support the local currency.

“You'll see more protectionist type measures like that, or other ways to try to diversify their holdings in an effort to protect their currencies and try to prevent any sort of runaway issues there,” said Bechtel.

(Karen Brettell)

*****

FOR WEDNESDAY'S EARLIER LIVE MARKETS POSTS:

MORTGAGE RATES DIP BUT NOT BELOW 7%; BORROWERS UNIMPRESSED - CLICK HERE

S&P 500 REACHING FOR THE STARS - CLICK HERE

PLAYING FTSE WITH THE DOW - CLICK HERE

DECIPHERING THE BOND MARKET'S UNUSUAL SELLOFF - CLICK HERE

WHY ITALIAN SMIDS WILL OUTPERFORM IN 2025 - CLICK HERE

TRUMP'S AI PLEDGE OUTWEIGHS TARIFF FEARS; STOXX AT RECORD - CLICK HERE

EUROPE BEFORE THE BELL: FUTURES UP AS TRADERS DIGEST TRUMP COMMENTS - CLICK HERE

THEY DO KNOW STARGATE IS SCI-FI, RIGHT? - CLICK HERE

Disclaimer: The information provided on this website is for educational and informational purposes only and should not be considered financial or investment advice.

Related Articles

KeyAI