Dollar falls, stocks pare gains after Trump inauguration

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NEW YORK, Jan 20 (Reuters) - The dollar was down but U.S. stock indexes pared their gains in the last day of a choppy trading week, after Donald Trump's inaugural speech as U.S. President prompted investor concern about protectionist trade policies.

U.S. Treasury yields fell slightly as Trump spoke but were still up on the day. The dollar, which has lost some of its momentum in recent weeks, was off 0.2 percent against six major currencies. It hit a session low during the speech before paring losses.

In his speech Trump, the country's 45th President, promised to put 'America First' and that the U.S. would follow two rules: buy American and hire American.

"There's a concern about what his trade policies will be," said Jamie Cox, managing partner of Harris Financial Group, after he attended the inauguration in Washington D.C. "That's probably the No. 1 area where Trump will have to tone down his rhetoric because we do have to work with other nations."

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Scenes from Inauguration Day in Washington, D.C.
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Scenes from Inauguration Day in Washington, D.C.
guests fill hte West Front of the US Caaptol in Washington, DC, on January 20, 2017, before the swearing-in ceremony of US President-elect Donald Trump. / AFP / Mark RALSTON (Photo credit should read MARK RALSTON/AFP/Getty Images)
U.S. First Lady Michelle Obama, left, wipes the shoulder of U.S. President Barack Obama while standing outside of the White House ahead of the 58th presidential inauguration in Washington, D.C., U.S., on Friday, Jan. 20, 2017. Trump is the first president since the dawn of national polling in the late 1930s to enter office with the approval of fewer than half of Americans -- in his case only 40 percent. Photographer: TKTK/Pool via Bloomberg
WASHINGTON, DC - JANUARY 20: (L-R) Tiffany Trump, Donald Trump, Jr., Ivanka Trump, Vanessa Trump and Jared Kushner arrive on the West Front of the U.S. Capitol on January 20, 2017 in Washington, DC. In today's inauguration ceremony Donald J. Trump becomes the 45th president of the United States. (Photo by Drew Angerer/Getty Images)
WASHINGTON, DC - JANUARY 20: The presidential motorcade drives down Pennsylvania Ave towards the U.S. Capitol on January 20, 2017 in Washington, DC. In today's inauguration ceremony Donald J. Trump becomes the 45th president of the United States. (Photo by Joe Raedle/Getty Images)
WASHINGTON, DC - JANUARY 20: Former Democratic presidential nominee Hillary Clinton arrives on the West Front of the U.S. Capitol on January 20, 2017 in Washington, DC. In today's inauguration ceremony Donald J. Trump becomes the 45th president of the United States. (Photo by Chip Somodevilla/Getty Images)
WASHINGTON, DC - JANUARY 20: Former President George W. Bush and Laura Bush wave as they arrive on the West Front of the U.S. Capitol on January 20, 2017 in Washington, DC. In today's inauguration ceremony Donald J. Trump becomes the 45th president of the United States. (Photo by Alex Wong/Getty Images)
WASHINGTON, DC - JANUARY 20: Former President Jimmy Carter and wife Rosalynn Carter arrive on the West Front of the U.S. Capitol on January 20, 2017 in Washington, DC. In today's inauguration ceremony Donald J. Trump becomes the 45th president of the United States. (Photo by Joe Raedle/Getty Images)
US Chief Justice John Roberts (C-front) arrives with US justice William Rehnquist (L) on the platform of the US Capitol in Washington, DC, on January 20, 2017, before the swearing-in ceremony of US President-elect Donald Trump. / AFP / Mandel NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
WASHINGTON, DC - JANUARY 20: Former U.S. Preident George W. Bush and former first landy Laura Bush arrive at the swearing in ceremony at the United States Capitol January 20, 2017 in Washington, DC. Donald J. Trump will become the 45th President of the United States today. (Photo by Doug Mills - Pool/Getty Images)
US President Barack Obama and Vice President Joe Biden arrive for the Presidential Inauguration of Donald Trump at the US Capitol in Washington, DC, on January 20, 2017. / AFP / POOL / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
WASHINGTON, DC - JANUARY 20: President Elect Donald Trump arrives on the West Front of the U.S. Capitol on January 20, 2017 in Washington, DC. In today's inauguration ceremony Donald J. Trump becomes the 45th president of the United States. (Photo by Alex Wong/Getty Images)
WASHINGTON, DC - JANUARY 20: President Elect Donald Trump arrives on the West Front of the U.S. Capitol on January 20, 2017 in Washington, DC. In today's inauguration ceremony Donald J. Trump becomes the 45th president of the United States. (Photo by Scott Olson/Getty Images)
US President elect Donald Trump (R) and Vice President elect Mike Pence seat during the swearing-in ceremony on in front of the Capitol in Washington on January 20, 2017. / AFP / Timothy A. CLARY (Photo credit should read TIMOTHY A. CLARY/AFP/Getty Images)
WASHINGTON, DC - JANUARY 20: U.S. Vice President Mike Pence takes the oath of office from Supreme Court Justice Clarence Thomas as his wife Karen Pence looks on, on the West Front of the U.S. Capitol on January 20, 2017 in Washington, DC. In today's inauguration ceremony Donald J. Trump becomes the 45th president of the United States. (Photo by Drew Angerer/Getty Images)
WASHINGTON, DC - JANUARY 20: President Elect Donald Trump shakes hands with Vice President Mike Pence on the West Front of the U.S. Capitol on January 20, 2017 in Washington, DC. In today's inauguration ceremony Donald J. Trump becomes the 45th president of the United States. (Photo by Alex Wong/Getty Images)
US President elect Donald Trump (C) salutes his daughter Ivanka and other family members during the swearing-in ceremony on in front of the Capitol in Washington on January 20, 2017. / AFP / Timothy A. CLARY (Photo credit should read TIMOTHY A. CLARY/AFP/Getty Images)
US President-elect Donald Trump is sworn in as President on January 20, 2017 at the US Capitol in Washington, DC. / AFP / Mark RALSTON (Photo credit should read MARK RALSTON/AFP/Getty Images)
WASHINGTON, DC - JANUARY 20: U.S. President Donald Trump delivers his inaugural address on the West Front of the U.S. Capitol on January 20, 2017 in Washington, DC. In today's inauguration ceremony Donald J. Trump becomes the 45th president of the United States. (Photo by Drew Angerer/Getty Images)
Attendees listen as U.S. President Donald Trump speaks during the 58th presidential inauguration in Washington, D.C., U.S., on Friday, Jan. 20, 2017. Donald Trump will become the 45th president of the United States today, in a celebration of American unity for a country that is anything but unified. Photographer: Daniel Acker/Bloomberg via Getty Images
Attendees stand during the 58th presidential inauguration in Washington, D.C., U.S., on Friday, Jan. 20, 2017. Donald Trump will become the 45th president of the United States today, in a celebration of American unity for a country that is anything but unified. Photographer: Daniel Acker/Bloomberg via Getty Images
US President Donald Trump and First Lady Melania Trump(L) wait with former President Barack Obama(2nd-R) and Michelle obama before their departure from the US Capitol after Trump's inauguration ceremonies at the US Capitol in Washington, DC, on January 20, 2017. / AFP / Robyn BECK (Photo credit should read ROBYN BECK/AFP/Getty Images)
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The Dow Jones Industrial Average was up 57 points, or 0.29 percent, to 19,789.4, the S&P 500 had gained 4.68 points, or 0.206742 percent, to 2,268.37 and the Nasdaq Composite had added 9.86 points, or 0.18 percent, to 5,549.94.

The benchmark S&P 500 was on track to end the week down slightly, and both the Dow and Nasdaq were each set for weekly declines.

The S&P 500 has fallen a median 2.7 percent in the month after each new president has taken the keys to the White House since Herbert Hoover did so in January 1929, according to Reuters analysis.

There has been a pause in the post-election market rally in risky assets such as equities amid questions over how Trump's administration will carry out ambitious campaign promises of lower taxes, more government spending and looser regulations.

The MSCI all world stock index also pared gains but was still up 0.26 percent on the day. It was poised for a weekly decline.

Caution ahead of the former reality TV star's presidency offset better-than-expected economic data from China and comments from Federal Reserve Chair Janet Yellen, in which she sounded less hawkish than the previous day.

Tens of thousands of law enforcement officers and miles of barriers were in place in Washington D.C. as it braced for hundreds of thousands of people planning to celebrate or protest Trump's inauguration.

Treasury yields declined slightly from 2-1/2 week highs, likely spurred by safety buying of lower-risk assets. Benchmark 10-year notes were last down 6/32 in price to yield 2.48 percent, after earlier rising as high as 2.51 percent.

Financing for an expected bump up in government spending may drag further on bond prices and send yields higher.

"Bond investors are trying to get ahead of the possibility that rates will rise after he's actually in office because they think he's going to move very quickly in the first 200 days to enact new programs to help the economy, and the Fed will raise rates sooner rather than later and possibly lead to a further selloff in long-term Treasury bonds," said Tom di Galoma, managing director at Seaport Global in New York.

European stocks closed down 0.07 percent. The index had its worst week since before Trump's Nov. 8 election.

The Mexican peso briefly trimmed its gains during Trump's inaugural speech, but then returned to its initial levels because the president did not announce details of measures that affect Mexico.

Spot gold, on track for a fourth straight week of gains, was essentially flat on Friday at $1,204.78 per ounce.

Oil prices rose for the second day in a row on expectations a weekend meeting of the world's top oil producers would demonstrate compliance to a global output cut deal.

Brent crude, the international benchmark, rose 2.4 percent to $55.44. U.S. West Texas Intermediate (WTI) crude oil futures were trading up 2.2 percent at $52.49 per barrel. (Additional reporting by Karen Brettell in New York, Vikram Subhedar in London,; Editing by Bernadette Baum and Nick Zieminski)

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Markets

S&P 500 2,343.98 -1.98 -0.08%
DJIA 20,596.72 -59.86 -0.29%
NASDAQ 5,828.74 11.04 0.19%
DAX 12,064.27 24.59 0.20%
NIKKEI 225 19,262.53 177.22 0.93%
HANG SENG 24,358.27 30.57 0.13%
USD (per EUR) 1.08 0.00 0.08%
USD (per CHF) 0.99 0.00 0.01%
JPY (per USD) 111.34 0.03 0.02%
GBP (per USD) 1.25 0.00 0.01%

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