The dollar drops sharply following reports of Trump's delay in imposing tariffs.

The dollar drops sharply following reports of Trump's delay in imposing tariffs.
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The US dollar fell sharply during trading on Monday after a report published by the Wall Street Journal stated that the elected President Donald Trump will not impose tariffs immediately after his inauguration, which is planned for later in the session.

The newspaper reported that Trump will issue a wide-ranging trade memo on Monday that does not reach the level of imposing new tariffs on his first day in office, later confirming this by one of the officials in the incoming Trump administration.

In terms of trading, the dollar index – which measures the performance of the US currency against a basket of six other major currencies – fell by 1.06%, recording 108.46 points.

The decline of the dollar came in light of Trump's decision to impose tariffs at a later time, meaning that inflation will have more time to be affected by the Federal Reserve's tight monetary policy, moving towards the 2% target, thereby allowing room for further interest rate cuts this year.

The decline followed a rally in the dollar driven by some analysts' expectations that Trump might invoke the International Emergency Economic Powers Act  (IEEPA) to impose his tariffs after taking control of the White House again.

The International Emergency Economic Powers Act is a federal law in the United States that allows the president to regulate economic transactions in response to unusual and extraordinary threats.


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