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Dollar dives on tariff comments

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Bitcoin hits new record high

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Trump takes office at 1700 GMT

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Markets price 80% chance of BOJ rate hike this week

By Nell Mackenzie

LONDON, Jan 20 (Reuters) - The dollar fell broadly on

Monday, while European stocks jumped, after an official for the

incoming U.S. administration said President-elect Donald Trump

would stop short of imposing tariffs at his inauguration, which

takes place later in the day.

European equity markets were firmly in positive territory in

afternoon trading after the Wall Street Journal reported Trump

would not impose import tariffs immediately after he's sworn in

later on Monday.

The pan-European STOXX 600 rose 0.3%, with the

region's main indices all up roughly 0.5%. MSCI's All-World

index was last up 0.4%.

The dollar tumbled by as much as 1.3% at one point,

falling particularly hard against the currencies of the United

States' largest trading partners, such as the Canadian dollar

, the Mexican peso, the euro and

China's yuan.

Trump takes the oath of office at noon Eastern Time

(1700 GMT), and promised a "brand new day of American strength"

at a rally on Sunday.

He has stoked expectations of an immediate slew of executive

orders and, in a reminder of his unpredictability, launched a

digital token on Friday, which soared above $70 before sliding

to around $50 as traders turned uneasy.

Monday is a U.S. holiday, so the first responses to his

inauguration in financial markets may be felt in foreign

exchange and then during Asian trade on Tuesday.

Euro zone bond yields steadied by 1518 GMT.

"In the last two weeks we have seen two conflicting views

from the new administration - the hard-liners on tariffs and

those who favour a more market-friendly approach," Frederik

Ducrozet, head of macroeconomic research at Pictet Wealth

Management, said.

"So, this perception that the door is open to negotiations

is important. But it doesn't tell us where we will end and I

will be waiting for details on the scope of tariffs, which

sectors will be impacted," he said, adding: "The fact that he

might be choosing a gradual approach is an encouraging sign."

The dollar fell 1.15% against the Canadian dollar

to C$1.4319 and dropped 1.4% against the Mexican peso.

Trump has threatened tariffs of as much as 10% on global

imports and 60% on Chinese goods, plus a 25% import surcharge on

Canadian and Mexican products, duties that trade experts say

would upend trade flows, raise costs and draw retaliation.

The yuan itself strengthened sharply in the offshore market

, leaving the dollar down almost 1% on the day at 7.274.

The Australian dollar, which can serve as a more

liquid proxy for the Chinese currency, rose 1.2% on the day to

$0.6262. The euro, meanwhile rose 1.3% on the day to

$1.0401, set for one of its largest one-day rally since late

2023.

Bitcoin hit an all-time high of $109,071.86 in early

European trading before falling back to trade around

$106,030.10, still a 1.2% gain for the day. The world's largest

cryptocurrency has surged more than 10% so far this month.

Trump's new cryptocurrency launched on Friday - known as

$TRUMP - soared to nearly $12 billion in market value, drawing

billions in trading volume. First Lady Melania Trump's

cryptocurrency launched on Sunday hit a market cap of $1.9

billion.

In commodities, gold rose 0.2% to $2,708 an ounce and

Brent crude futures fell 1.2% to $79.82, while U.S.

crude dropped 1.6% to $76.62, on expectations that Trump may

ease curbs on Russia's energy sector in return for a truce in

Ukraine.