Dow futures rise and dollar dives as tariffs appear not to be a Day 1 action item for Trump

Futures on the Dow Jones Industrial Average rose Monday in electronic trade as the U.S. dollar slumped after a report that President-elect Donald Trump won’t impose new tariffs during his first day in office.

Dow futures YM00 surged as much as 305 points, as the S&P 500 ES00 and Nasdaq 100 NQ00 contracts also gained ground, following a Wall Street Journal report that Trump will sign a memorandum to study trade policies but stop short of imposing new levies.

Related: As Trump is inaugurated, here are his Day 1 plans

The U.S. stock market is closed in observance of the Martin Luther King Jr. holiday .

Trump had for months threatened 25% tariffs on Canada and Mexico, and a new 10% tariff on imports from China, on his first day of office.

The dollar USDCAD fell vs. its Canadian counterpart, tumbling to C$1.4283 from C$1.4477, and the dollar USDMXN fell to 20.5107 Mexican peso from 20.7877 peso.

The euro EURUSD surged vs. the dollar, rising to $1.0427 from $1.2076, while the dollar USDJPY fell to 155.51 yen from 156.30 yen.

Citigroup currency analysts led by Daniel Tobon said the news suggests Trump’s tariff policies have “more bark than bite” as they exited a recommendation to short the euro vs. the dollar.

Kathleen Brooks, research director at XTB, called the Monday moves a relief rally.

“We think that this news will have a positive impact on global stocks, including U.S. chip makers, who rely on Chinese imports, and they could also rally on the back of this news,” she said.

Kyle Chapman, FX markets analyst at Ballinger Group, said the moves suggest the dollar peak may have been reached.

“None of this necessarily precludes heavy tariffs later down the line — he has four years to achieve his goals. But the probability of the worst-case, blanket tariff scenario has clearly diminished, and so has [euro/dollar] parity,” he said.

The German DAX DX:DAX stock-market index rose 0.6% to reach a new record high, as BMW XE:BMW, Daimler Truck XE:DTG and Mercedes-Benz XE:MBG rose. Canada’s S&P/TSX 60 XX:SPTSE index gained 0.5%.

Jamie Chisholm contributed.