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Global financial markets on edge ahead of Donald Trump's presidential inauguration Inauguration: Global financial markets hold their breath as President Donald Trump takes office
(35 minutes later)
London’s FTSE 100 stock index was little changed on Friday, putting it on track for its worst week since November, ahead of Donald Trump’s inauguration as 45th president of the US. European stock markets ended the week dominated by caution as the presidential inauguration of Donald Trump got underway in the US, possibly ringing in a new era for global financial markets.
The index of blue chip shares oscillated between slim gains and marginal losses in morning trading while shares across the rest of Europe inched marginally lower. In the UK, the FTSE 100 ended the session little changed making this week one of its worst since November.
"Trump’s promise of a major fiscal stimulus plan has come as a welcome respite from the monetary policy led days gone by. Yet, with expectations come the chance of disappointment, and the future of the US stock market seems hugely dependent on Trump delivering on his promises," said Josh Mahony, analyst at trading company IG. The index had been on a tear, cranking out successive all-time record closes during the early part of January, spurred by a dropping pound.
"The problem is that no one knows for certain what Mr. Trump will do," investors at Janus Capital Group wrote in a note.  But sterling’s slide has paused in recent days as attention has shifted away from Brexit and towards the inauguration of Mr Trump and what it means for global economies and asset classes. 
The pan-European Stoxx Europe 600 index ended the day largely unchanged too, and stocks in the US were mostly around 0.5 per cent higher at the European market close.
Shares tend to be considered a relatively risky asset to hold during times of market uncertainty, with investors preferring to snap up top-rated government bonds, currencies considered particularly stable – like the Swiss franc – and gold.Shares tend to be considered a relatively risky asset to hold during times of market uncertainty, with investors preferring to snap up top-rated government bonds, currencies considered particularly stable – like the Swiss franc – and gold.
“The problem is that no one knows for certain what Mr. Trump will do,” investors at Janus Capital Group wrote in a note to clients.
“Two very different forces are pulling on the president-elect,” they added. “The first is the populist movement that elected him. The second is the conservative orthodoxy of the Republican Party that now claims him.”
In the aftermath of Mr Trump’s November election victory stock markets especially in the US surged, spurred by the New York businessman’s campaign promises of tax and regulatory roll backs and higher infrastructure spending.
Bank stocks enjoyed particularly sharp rises and the dollar rallied hard too, but in recent days moves have become more muted.
  
  On Friday, a commonly-used trade-weighted dollar index inched marginally higher during the European trading session.
The US election, broadly considered the most divisive in history, sent markets roiling — both before and after the result was announced and Mr Trump has continued to buffet stocks and the dollar with comments and tweets since. Gold was slightly higher on the day, trading at around $1,203.60 per troy ounce.
The dollar slipped slipped slightly overnight into Friday after US Federal Reserve Chair Janet Yellen spoke of a gradual pace of rate hikes and sounded less hawkish than some had expected. On Friday afternoon the dollar index, which measures the strength of the buck against a whole basket of other currencies, was little changed. It had risen sharply on Thursday, spurred by some strong jobs and housing data. Figures also showed that the number of Americans filing for unemployment benefits also dropped unexpectedly to near the lowest levels in decades. Schroders’ Chief Economist Keith Wade wrote in a note this week that while investors "have fully bought into Trump’s promise to 'make America great again' […]  the impact of the new president’s fiscal policies will not be felt until end-2017 and into 2018”.
Elsewhere major stock indexes across the US were broadly higher.  And he warned that “there are some tricky waters to be navigated before they take effect.”