A look at the day ahead in European and global markets from Tom Westbrook

Markets are looking to the first hours of Donald Trump's presidency to set the tone for his second term. U.S. markets are closed for Martin Luther King day, so the immediate focus will fall on foreign exchange markets and stock and bond futures.

Often, market performance through presidential terms reverts to more reliable relationships with economic trends, but Trump tends to inject volatility and has foreshadowed bold policy shifts.

He is the first President since Grover Cleveland in the late 1800s to serve two non-consecutive terms and his return is being met with a bout of late trepidation in markets.

With the dollar having steamrolled to multiyear highs in recent weeks, traders are wondering whether it could beat a retreat if Trump takes things slowly. They are also questioning whether tariffs, in fact, are dollar positive or not.

The greenback drifted lower in cautious Asia trade.[FRX/]

Investors have been selling bonds and buying dollars since the middle of September, anticipating not only that Trump would boost growth but that his eagerness to raise tariffs, cut taxes and crack down on immigration may stoke inflation.

He has said he will sign nearly 100 executive orders within hours of taking office and, at a rally on Sunday, repeated vows to deport immigrants, slash regulations and unleash energy resources. He had an apparently friendly phone call with Chinese President Xi Jinping on Friday.

Trump will take the oath of office at noon, eastern time (1700 GMT), inside the rotunda of the Capitol building, with cold weather forcing proceedings indoors for the first time in 40 years.

Trump has underscored his unpredictabilty by saying he would "save" Chinese social media app TikTok, which had been shut down in the U.S. on national security grounds by a law that took effect on Sunday.

On Friday he also launched a digital token, which initially soared before sinking somewhat after his wife, Melania Trump, launched a separate token and even some seasoned cryptocurrency investors started to get uneasy about the speculative surge.

Bitcoin, which has surged more than 45% since Trump's election, dropped about 3% to $101,800 in another possible hint that a lot of expectations are already well-priced in the market.

Key developments that could influence markets on Monday:

- Donald Trump presidential inauguration