As bitcoin reaches a record high prior to Trump's inauguration, the dollar declines.

Bitcoin, supported by lower US inflation figures and prospects of several rate cuts from the Federal Reserve, reached an all-time high of $109,071.86 before closing 4.2% higher at $107,120. As a "crypto president," Trump is anticipated to sign executive orders that promote digital assets. However, analysts cautioned that if policy actions are postponed, there may be a "sell the news" reaction.The dollar index, which compares the US dollar to six major currencies, dropped 0.36% to 109.02 from its 26-month high of 110.17 last week. Derek Halpenny, head of research global markets at MUFG, stated, "There are high expectations of Trump announcing trade tariffs under executive order along with many other policy announcements that could prompt further US dollar gains."Despite Monday's decline, the dollar has increased by 4% since Trump won the election in November due to hopes that his plans will increase inflation and economic growth. Though they cautioned about short-term risks associated with market expectations for prompt tariff steps, Goldman Sachs strategists anticipate the possibility of a further 5% increase in the dollar over the next months.

Amid rumors that the Bank of Japan may increase its policy rate this week, the yen held close to a one-month high. The US Martin Luther King Jr. Day holiday resulted in low trading volume.Trump reaffirmed his intentions to enforce stringent immigration restrictions at a rally on Sunday, which increased market turbulence. Analysts warned that a dollar fall in the upcoming weeks might be triggered by any indications of a more selective approach to tariffs. The introduction of the "official" Donald Trump memecoin has shocked the cryptocurrency community. Its value surged after its Friday night debut, momentarily hitting a $14 billion market cap.