Dow, S&P 500, Nasdaq rise on Trump ban on tariffs.

The U.S. dollar (DX=F, DX-Y.NYB) has been volatile since Donald Trump took office, hitting nearly two-year highs after the president failed to enact sweeping tariffs on his first day in office. He is retreating.

The move surprised investors because the emergency order allows for faster rate hikes, unlike the alternative investigation process, which can take longer to complete.

Still, the dollar recovered about half of its losses after the president later said tariffs on Mexico and Canada could be imposed on February 1. He issued a note. Directing federal agencies to review U.S. trade policy, which could eventually lead to chilling tariffs on various trading partners.

Mohamed El-Erian, chief economic adviser at Allianz, told Yahoo Finance’s Morning Brief program that the dollar’s gains and losses indicate a new normal for the market.

“The message is that this is not a one-day event,” he said, adding that there are both upside and downside risks. “This is something that will stay with us.”

In the meantime, Morgan Stanley strategist Michael Zezas and economist Michael Gapen said in a note on Tuesday that Trump’s back-and-forth “reminds us that vigilance is necessary as the US policy path can evolve rapidly.” The group is of the view that no policy adjustments will be heard until the middle of the year.

The greenback’s recent price action has been driven primarily by two major factors: Trump’s election and Republican nominations, along with a recalibration of future Fed easing in light of strong economic data.

Since hitting September lows, the U.S. Dollar Index (DX-Y.NYB), which measures the greenback against a basket of six foreign currencies (the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc), is up about 10%. Collected. It is up about 5 percent since the election.