Bitcoin Hits $109,000 Amid Trump's Tariff Moves

Bitcoin reached a record high of over $109,000 before retreating below $102,000, fuelled by market speculation surrounding Trump’s policy announcements. The US dollar gained against the loonie and peso after Trump proposed 25% tariffs on Canadian and Mexican imports, reversing earlier losses sparked by his inauguration speech. Meanwhile, sterling and the euro slipped 0.3%, and the Japanese yen strengthened on expectations of Bank of Japan policy tightening.

Equities

The FTSE 100 edged up 0.2% on Monday, marking a second consecutive record close, though it retreated slightly from its intraday peak. Thin trading volumes reflected a US market holiday.

Investors focussed on Donald Trump’s return to the White House, particularly his stance on tariffs and international relations, as well as upcoming earnings reports and the annual Davos summit.

Among individual stocks, Reach saw a notable 21% surge, its best day in over four years. The publisher of the Daily Mirror forecasted fiscal 2024 operating profit to exceed market expectations, buoyed by a robust fourth quarter.

Sanderson Design Group fell 11% after issuing a profit warning, citing weaker sales of branded products and a challenging end to the fiscal year in the UK. Pod Point Group dropped 35%, attributing the decline to reduced demand for electric vehicles, which led to a downward revision of its 2024 revenue forecast.

Across the Atlantic, US markets reacted to the return of Donald Trump to the presidency. The S&P 500 futures rose 0.2%, while Treasury yields saw a rally. Investors were cautious about Trump’s proposed tariffs, with the dollar climbing to a five-year high against the Canadian dollar before stabilising at C$1.44.

Cryptocurrencies faced pressure, with Bitcoin retreating from highs near $110,000 to trade at around $100,000. A Trump-themed memecoin halved in value, dropping from $75 to $36, as markets awaited clearer policy signals.

Battery stocks in South Korea declined after Trump revoked an order promoting electric vehicle adoption, favouring traditional energy sectors instead.

During Trump’s first term, the S&P 500 rose nearly 68%, though volatility persisted, driven in part by a trade war with China. The FTSE 100 and global indices now await further developments as Trump’s policies on tariffs, energy, and taxation begin to unfold.

 Forex & Commodities

The US dollar rebounded slightly after President Donald Trump suggested tariffs of 25% on imports from Canada and Mexico could be announced as early as 1 February. This announcement reversed some of the dollar’s previous losses, with the currency rising 0.6% to 1.4397 against the Canadian dollar and 0.9% against the Mexican peso. The dollar index edged up 0.2% to 108.21 after its sharpest one-day drop since late 2023, while the yen strengthened, with the dollar falling 0.5% to 154.78 yen amid expectations of a Bank of Japan rate hike.

Gold prices climbed to a 10-week high, with spot gold rising 0.7% to $2,727.19 per ounce, near its all-time peak. This increase was fuelled by a weaker dollar and investor uncertainty around Trump’s tariff plans. Silver also gained 0.5% to $30.65 per ounce, while palladium and platinum dipped 1.7% and 0.2%, respectively.

Oil prices fell, with Brent crude down 0.8% at $80.15 and West Texas Intermediate crude dropping 1.7% to $76.58. Market focus shifted to Trump’s proposed energy policies, including a national energy emergency and accelerated oil and gas projects. US sanctions on Russian oil producers have tightened global supply, but future price movements will depend on Trump’s actions and geopolitical developments.