LONDON/SINGAPORE/NEW YORK (Reuters) - Donald Trump wasted no time in issuing policy announcements after his inauguration, leaving financial markets to catch up as he went easier than expected on China for now but warned Mexico and Canada could face 25% tariffs from next month.

China's currency was relieved as Beijing avoided an instant blizzard of executive orders but Mexico's peso and Canada's dollar weren't so lucky as some off-the-cuff talk about tariffs there from February ensured they took a tumble.

Trump also floated the idea of universal tariffs, but said the U.S. was not ready for that yet.

The dollar didn't seem to know quite which way to turn. Having drooped during the inauguration, it turned on the tariff talk to hit a five-year high against its Canadian counterpart, a rebound that also pushed the euro and pound down in Europe.

Trump also said he wanted to reverse the U.S. trade deficit with the European Union, either with tariffs or more energy exports.

Mexico and Canada are the most exposed though. The United States imported around $475 billion worth of goods from the former and $418 billion from the latter last year.

Nigel Green, CEO of the deVere financial advisory group, said that was 30% of all U.S. imports, meaning the consequences of 25% tariffs "could be seismic".

Wall Street's reaction was still to come. It was closed on Monday for a public holiday but futures markets pointed to a modestly positive start when traders get their first chance to react later on Tuesday. [.N]

Asian investors had seen China's yuan and Hong Kong shares push higher overnight. Battery and wind energy stocks dropped though due to confirmation Trump was reversing green policies and would pull the U.S. out of the Paris climate change accord.

Trading was also a reminder of both the rollercoaster that markets rode through Trump's first term and how investors feel more sanguine about the risks in his second term in the White House.

An aggressive round of tariffs - where they exceed current assumptions - could drive swathes of economies from Canada to Europe into recession.

The unpredictability of U.S. policies, however, is not deterring all investors.

"We are active managers so for us this is a great environment, we like uncertainty and we like volatility as it gives us opportunities," Konstantin Veit, a European portfolio manager at bond giant PIMCO, said.

OVERHANG

Trump had vowed to immediately impose steep tariffs of 10% to 20% on global imports into the U.S. and 60% on goods from China, but a memo he issued after taking office only directed agencies to research and investigate the U.S. trade deficits.

The dollar hit a five-year high of 1.452 Canadian dollars before steadying around C$1.44. It rose but stayed below last month's highs on the Mexican peso and volatility gauges for both stocks and the most directly impacted currencies remained well below their November U.S. election levels.

Treasuries rallied, S&P 500 futures rose 0.5% and MSCI's 46-country main world share index looked set to push back into positive territory later. [CNY/][.HK]

"Prepared remarks (from Trump) and what's off the cuff - both of them will move markets," Tai Hui, chief market strategist in Asia at J.P. Morgan Asset Management, told a briefing in Singapore.

"Rather than basing all our investment decisions on what is announced... we just have to maybe take a step back and just absorb."

PRO-BUSINESS, BUT AT A COST

Trump enters office with an ambitious agenda spanning trade, immigration, tax cuts and deregulation which has the potential to boost U.S. corporate profits. But it could also fan inflation and force the Fed into a rethink on U.S. interest rates.

In his inaugural speech, Trump pledged to bolster the U.S. oil, gas and power industries and to crack down on immigration.

He pardoned supporters who attacked the Capitol four years ago and declared an emergency to clear the way for more oil and gas production.

"Most of what he has been talking about will help spur growth and corporate profits," said Jack Ablin, chief investment officer at Cresset Capital.

"But many will come at a cost. We will need to see a lot of earnings growth to make up for even a minor increase in interest rates that could follow higher tariffs" and other proposals, he said.

Cryptocurrency markets, which soared in the run-up to Trump taking office, stalled as the lack of any instant crypto-friendly announcements stirred some disappointment.

Bitcoin, which came close to $110,000 on Monday, was trading around the $103,000 mark and a Trump-branded memecoin that hit almost $75 on the weekend fell to $36.

During the first year of Trump's first administration, the S&P 500 rose 19.4%, following a 5% rally in his first 100 days.

For the entirety of his first term, the S&P 500 rose nearly 68%, but saw bouts of volatility, stemming in part from a trade war Trump fought with China.

"The big question on investors' minds right now is going to be 'how' -- how will he cut costs and lower inflation and lower interest rates," said Josh Strange, president of Good Life Financial Advisors of NoVA, a financial advisory firm.