The dollar weakened against major currencies on Monday as traders braced for a series of policy announcements following Donald Trump's inauguration. Markets are focused on his plans to raise tariffs, tighten immigration, lower taxes and increase deregulation, which are expected to have an impact on inflation. However, trading volumes are expected to remain low throughout the session, as U.S. markets are closed for the Martin Luther King Jr. holiday. Last week, the dollar index snapped a six-week winning streak after a surprise slowdown in U.S. core inflation, coupled with weaker-than-expected producer price index and retail sales data, fueled speculation of further Federal Reserve interest rate cuts this year. Markets are currently pricing in a total of 42 basis points of easing for 2025. The dollar weakened broadly, with the most significant declines against the New Zealand and Australian dollars. (AL)

Source: Trading Economics