The US dollar fell sharply on Monday after reports suggested President-elect Donald Trump may delay imposing trade tariffs initially expected soon after his inauguration. The unexpected news unsettled markets that had anticipated swift action on trade, which had fueled the dollar’s rise since Trump’s November election victory.

By 09:20 ET (14:20 GMT), the Dollar Index, tracking the dollar against six major currencies, dropped 1.1% to 108.020. This decline follows a two-year high reached by the index just last week.

The Wall Street Journal reported that Trump plans to issue a directive on trade policies after taking office, asking federal agencies to evaluate current trade agreements and relationships with key partners like China, Canada, and Mexico. However, the directive reportedly avoids immediate implementation of new tariffs, with internal debates continuing over how to fulfill Trump’s campaign pledges to impose significant import tariffs, especially on Chinese goods.

The dollar had gained roughly 4% since the election, as markets bet on Trump’s policies driving inflation and potentially leading to sustained higher interest rates. Analysts at ING noted, “Markets are closely watching Trump’s first executive actions to understand his trade policy direction, especially regarding tariffs and their impact on the US’s trading partners.”