Turnaround Tuesday began with a softer profile for the dollar, which pared early gains in North America yesterday. Follow-through selling has further pressured the dollar against most G10 and emerging market currencies, though the downticks appear corrective. The S&P 500 recovered after closing the post-election gap, providing support for equity trading today. Major Asia-Pacific markets rallied, except for Japan, while U.S. index futures gained 0.4%-0.7%.
Gold stabilized after a 1% drop — the first decline in five sessions — while February WTI consolidated above $78, following a peak near $79.25.

Asia-Pacific Markets
BOJ Deputy Governor Himino hinted at potential rate hikes during next week’s policy meeting, striking a balanced tone. The market has been oscillating between 10 and 15 basis points since mid-December, currently at the upper range. Himino and Governor Ueda also acknowledged uncertainties related to the new U.S. administration.
The dollar briefly traded below the 20-day moving average yesterday, marking its first dip below this level since December 12, but has since regained ground. It approaches resistance near JPY158.85, the post-U.S. employment data high from last July.

European Markets
The European Central Bank faces expectations of rate cuts totaling 75-100 basis points this year, a stark contrast to the Fed’s trajectory. Despite these expectations and U.S. tariff threats, the euro snapped a four-day decline yesterday and is trading higher today.
Sterling, however, has been the worst-performing G10 currency, dropping over 3% against the dollar in five sessions. The focus now shifts to the UK’s December CPI data, due tomorrow, which could influence further movements.

American Markets
Reports suggest the new U.S. administration may implement staged tariff increases, with monthly hikes of 2-5% spun as "moderate." Currently, the average U.S. tariff, excluding China, remains below 3%. Market attention is also drawn to inflation metrics, as the PPI is set to accelerate. The headline CPI, due tomorrow, is expected to rise, while core inflation remains steady.
The Dollar Index has climbed 10% from September lows, with two-thirds of the gain occurring post-election, holding firm above 109.30.