Donald Trump was officially inaugurated as the 47th President of the United States on Monday (January 20, 2025), leading to extreme fluctuations in the financial markets as trading commenced on Tuesday (January 21, 2025).
During Monday’s trading, the US dollar faced significant declines while the Nasdaq showed gains. In the commodities market, Gold prices remained volatile, and Oil prices dropped sharply.
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These fluctuations were triggered by concerns in the market about an executive order, specifically regarding the delayed announcement of increased import tariffs. This morning, Trump indicated that he is considering a 25% increase in import tariffs on goods from Canada and Mexico, set to take effect in February.
Market dynamics shifted again, with the US dollar regaining strength, leading to declines in EURUSD and GBPUSD of 61 and 80 pips respectively, while USDJPY rose by 60 pips. Furthermore, the Nasdaq index reversed course, dropping more than 300 points. Gold prices remained stable at around $2,707 per troy ounce as of 8:10 AM WIB. Nonetheless, with the prevailing uncertainty, the demand for Gold as a safe haven asset is likely to see an increase.
Oil prices, which had initially plummeted following Trump’s announcement to boost domestic production, rebounded to approximately $76.70 per barrel.
An increase in import tariffs could accelerate inflation, prompting the Federal Reserve to be more cautious in reducing interest rates, which bolstered the US dollar. Additionally, concerns about a potential trade war with Canada have put pressure on the Nasdaq index, while Oil prices rose again as Canada is one of the main suppliers of Oil to the United States.
Significant market movements are likely to continue today and in the future in response to policy plans or executive orders announced by Trump.
