The U.S. dollar slid against a basket of the other major currencies on Friday as markets reacted to Donald Trump’s inaugural speech after he was sworn in as president of the U.S.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.33% to 100.77 late Friday.
The index had climbed around 3.5% since Trump’s election win in November, but has fallen 1.49% so far this month amid worries over Trump's protectionist stance and following recent remarks in which he said the dollar was too strong.
On Friday, Trump said his administration would put "America first" and also promised new roads, bridges and highways.
But market sentiment was hit by the negative tone of the speech, which underlined uncertainty over how Trump will govern.
The dollar was slightly lower against the safe haven yen, with USD/JPY slipping 0.2% to 114.63 late Friday.
The euro pushed higher, with EUR/USD rising 0.36% to 1.0702, off Thursday’s lows of 1.0588.
The euro weakened on Thursday after European Central Bank President Mario Draghi downplayed the significance of the jump in euro area inflation in December and reiterated that quantitative easing can be increased if the outlook becomes less favorable.
The pound was also higher against the dollar, with GBP/USD up 0.23% at 1.2374 late Friday.
Sterling fell to the day’s lows of 1.2259 earlier after data showing the retail sales in the U.K. slumped 1.9% from a year earlier in December, the weakest reading since 2012.
Meanwhile, the Mexican peso rallied after Trump’s inauguration speech didn't specifically mention Mexico.
USD/MXN was down 1.66% at 21.59 from the previous day’s close at 21.95.
The Mexican peso has been hard hit by fears over potential changes to U.S. trade policy under the Trump administration.
In the week ahead, the economic calendar is light but Trump's policy plans in his first days in office are likely to dominate headlines. Investors will also be awaiting a first look at fourth quarter growth from the U.S. on Friday and from the U.K. a day earlier.
Tuesday’s data on euro area private sector activity will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 23
Canada is to publish data on wholesale sales.
ECB President Mario Draghi is to speak at an event in Italy.
Tuesday, January 24
The euro zone is to release data on private sector business activity.
The U.K. High Court is to deliver a ruling regarding the government's ability to bypass parliament and initiate Britain’s exit from the European Union by triggering Article 50.
The U.K. is also to release data on public sector borrowing.
The U.S. is to report on existing home sales.
Wednesday, January 25
Australia is to publish data on inflation.
The Ifo Institute is to report on German business climate.
Thursday, January 26
New Zealand is to publish its monthly inflation report.
The U.K. is to release the preliminary reading on fourth quarter growth.
The U.S. is to release data on initial jobless claims and new home sales.
Friday, January 27
Shanghai stock exchange will be shut for a holiday.
The U.S. is to round up the week with a preliminary estimate of fourth quarter economic growth, as well as a report on durable goods orders and revised data on consumer sentiment.
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