US dollar dips, stocks creep higher as second Trump term dawns

The US dollar drifted lower and global stocks were cautiously positive on Monday as investors awaited a flurry of policy announcements during the first hours of Donald Trump's second presidency and eyed a rate hike in Japan at the end of the week.

Monday is a US holiday, so the first responses to his inauguration in financial markets may be felt in foreign exchange and then during Asian trade on Tuesday.

European stocks edged lower after an initial tick upward at the open. The pan-European STOXX 600 crept down 0.2 percent, with the region's main indices all flat and Spain's down 0.1 percent. MSCI's All-World index was last up 0.1 percent.

"Trump dominates everything in terms of where we go," Societe Generale chief FX strategist Kit Juckes said in his morning note, referring to markets in general. He noted that trader positions betting on a rise in the US dollar had reached their highest since 2022.