The dollar fell slightly on the eve of Trump's inauguration.

Notice that, hours before Donald Trump's second inauguration as President of the United States, traders reduced their bullish positions on the dollar, causing the dollar to edge lower against most major currencies. The Bloomberg Dollar Index fell 0.3% on Monday as communication between Trump and China helped ease anxiety over the trade tensions between the two countries. The lack of liquidity due to the US holiday may have exacerbated the weakness of the dollar against currencies such as the Australian dollar and the offshore renminbi, potentially intensifying the weakness of the dollar against other currencies. "We are all waiting for the big events - Trump's speech and subsequent executive orders," said Rodrigo Catril, a strategist at the National Australia Bank in Sydney. "Liquidity is poor, so one should be cautious about interpreting price action signals." According to the latest data from the US Commodity Futures Trading Commission, speculative forex traders had increased their bets on a stronger dollar to the highest level since 2019. Betting on a stronger dollar after Trump's election victory has become a favored trade in the market, and closing such positions could increase the risk of significant market volatility. Currencies from New Zealand and Australia (often seen as proxies for risk sentiment) rose against the US dollar on Monday. The South Korean won, another currency sensitive to global trade and growth, ranked high among Asian currency gainers. Carol Kong, a strategist at the Commonwealth Bank of Australia, said, "The communication between the US and China is encouraging and has boosted market sentiment. The market seems to have high expectations for this week's policy statements. The risk lies in President Trump's potential failure to fulfill his major promises, which could bring more comfort to the market."