The U.S. dollar dropped while bitcoin reached a record high on Monday as markets awaited policy announcements following Donald Trump’s inauguration as U.S. president later in the day.
Thin trading was expected due to the Martin Luther King Jr. Day holiday in the U.S.
Bitcoin climbed to an all-time high of $109,071.86 before easing to $108,025, up 4.2%. The cryptocurrency has gained momentum amid softer U.S. inflation data and expectations of multiple Federal Reserve rate cuts.
Trump has pledged support for digital assets and is expected to issue executive orders promoting their adoption.
The dollar index fell 0.32% to 109.08, retreating from a 26-month high of 110.17 touched last week. Since November’s presidential election, the index has risen 4% as traders anticipated that Trump’s policies would drive growth and inflation.
The euro advanced 0.39% to $1.031, staying near last week’s two-year low amid ongoing tariff concerns. The yen strengthened, trading at 156.11 per dollar, close to a one-month high of 154.98 reached on Friday, as traders anticipated a Bank of Japan (BOJ) rate hike this week.
Meanwhile, analysts warned of potential market volatility, as delays in implementing Trump’s promised economic measures could lead to a “sell the news” reaction, disrupting recent positive momentum in risk assets. Investors remain focused on the policies Trump will enact upon taking office.
