In the wake of President Donald Trump's inauguration, financial markets experienced a whirlwind of reactions, particularly in the cryptocurrency and currency exchange sectors. Santiment's data reveals that Bitcoin prices underwent a swift correction following Trump's assumption of office. This correction came amid heightened social media activity, where traders expressed significant greed and fear of missing out (FOMO) on Bitcoin investments. Meanwhile, the UK's economic indicators presented a mixed picture, with potential stagflation looming due to various economic factors. Furthermore, Trump's tariff threats bolstered the US Dollar, while the Canadian and Mexican currencies suffered setbacks.
Santiment's analysis highlights that Bitcoin's price quickly adjusted post-inauguration. As traders flocked to social media, there was a palpable sense of greed and FOMO around Bitcoin trading. Despite the initial fluctuations, Bitcoin found stability above the $102,000 mark on Tuesday, indicating a possible consolidation phase for the digital currency.
In the UK, the latest jobs report delivered disappointing results for Threadneedle Street observers. The ILO Unemployment Rate edged higher to 4.4% for the three months leading up to November. However, average earnings surpassed expectations, registering at 5.6%, which prevented wage growth from declining sharply. These developments contribute to concerns about stagflation in the UK, driven by a weak pound, increased National Insurance contributions, or potential rises in the minimum wage.
Currency markets also reacted strongly to President Trump's policy directions. The USD gained strength following his tariff threats, which spurred demand and risk aversion among investors. The GBP/USD pair traded deeply in the red near 1.2250 on Tuesday, while the EUR/USD remained in negative territory around 1.0350 during the European session.
Canadian and Mexican currencies bore the brunt of Trump's tariff pronouncements. His claim to impose a 25% tariff on exports from these countries led to significant currency depreciation. Conversely, optimism emerged in Chinese markets as Trump reinstated TikTok and refrained from mentioning tariffs on Chinese imports, signaling a potential easing of trade tensions between the US and China.
Amid these developments, Trump declared a national energy emergency, potentially increasing oil and gas production in the US. This move aims to curb inflationary pressures and stabilize energy prices amid ongoing economic uncertainties.