The dollar was on the front foot against the world's major currencies on Friday (20 January), as investors adopted a largely noncommittal stance ahead of Donald Trump's inauguration.

The greenback was 0.31% higher against the yen, buying ¥115.22, and rose 0.29% and 0.23% against the Swiss franc and the euro respectively, trading at CHF1.0091 and 0.9403 euro cents. The US currency was also higher against its Canadian and Australian counterparts, rising 0.41% against the former and 0.42% against the latter, to exchange hands at CAD$1.3372 and AUD$1.3275 respectively.

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Trump will officially be sworn in as the 45th US president later this afternoon and analysts forecast the official opening of the Trumps's era could trigger some turmoil in the markets.

"Trump changed the market sentiment towards the dollar over the last few days," said Jameel Ahmad, vice-president of market research at FXTM. "The markets took his comment that 'The dollar is too strong' seriously and many traders responded with defensive positions. We've seen this in the number of clients trading long on gold, a safe-haven investment."

Michael Hewson, chief market analyst at CMC Markets, added the risk of volatility was very concrete.

"We can certainly expect some measure of volatility if Trump gives any further indications of the types of policies he intends to pursue in the coming weeks given the lack of detail that came out of his press conference last week," he said.

According to Oanda's senior market analyst Craig Erlam, markets were displaying exactly the kind of caution expected given Trumps "incredible ability" to send investors into a frenzy.

"Throughout his campaign and since winning the presidency back in November, we've repeatedly seen two sides to Trump," he said.

"The market friendly pro-growth, low regulation side and the protectionist, combative side that makes investors extremely uneasy. With it being unclear which side he'll lean more towards today, traders are currently opting to sit on the fence but I imagine this will change dramatically later one once the ceremony gets underway."

Over in Britain, the pound declined against its main rivals, reversing the previous session's gains, when it had climbed above $1.23 after Theresa May told the World Economic Forum in Davos that Britain was open for business.

Sterling was 0.52 % lower against the dollar, fetching $1.2277, and traded 0.18% lower against the euro, exchanging hands at €1.1550.

The decline came after an unexpected slowdown in high-street spending for everything from household goods to food saw the worst fall in retail sales for five years last month, said official data.

Figures from the Office for National Statistics showed retail volumes dropped 1.9% year-on-year in December, far below economists' forecasts of a 0.4% decline and the biggest fall since April 2012.

"This inevitably lifts concerns that rising inflation and the associated squeeze on real incomes could increasingly dampen household spending appetite going forwards," said Chris Saint, senior analyst at Hargreaves Lansdown.

European Central Bank