LONDON (Reuters) - The dollar tumbled broadly on Monday after an official for incoming U.S. administration said President-elect Donald Trump would not impose new trade tariffs on his first day in office, alleviating some fears of an immediate blitz.

Trump, who takes office later in the day, has previously pledged tariffs of 10% on global imports, 60% on Chinese goods and a 25% import surcharge on Canadian and Mexican products, duties that may upend trade flows, raise costs and draw retaliation.

The Canadian dollar, the Mexican peso and the Chinese yuan all strengthened by 1-1.5%, while the euro rose 1.5%, set for its largest one-day rally against the dollar in well over a year.

European stock markets rallied.

COMMENTS:

FREDERIK DUCROZET, HEAD OF MACROECONOMIC RESEARCH, PICTET WEALTH MANAGEMENT, GENEVA:

"The market is very sensitive to this topic (tariffs)."

"In the last two weeks we have seen two conflicting views from the new administration - the hard-liners on tariffs and those who favour a more market-friendly approach."

"So, this perception that the door is open to negotiations is important. But it doesn't tell us where we will end and I will be waiting for details on the scope of tariffs, which sectors will be impacted."

"The fact that he might be choosing a gradual approach is an encouraging sign."

NICK REES, HEAD OF MACRO RESEARCH, MONEX EUROPE, LONDON:

"Markets seem to be taking comfort from a headline suggesting that day-one Trump tariffs are off the table. That said, we think this confidence might be a little misplaced. Broad based day-one tariffs were always unlikely, but more targeted import levies shortly after inauguration day are another question."

"On this point, we think a note that Trump will direct Federal agencies to evaluate U.S. trading relationships with China and America’s continental neighbours is interesting. The devil will be in the detail, and we are yet to see the memo, but we would not be surprised if markets ultimately unwind much of this latest move as the particulars become clearer in the coming hours and days."

KATHLEEN BROOKS, RESEARCH DIRECTOR, XTB:

"The impact will hinge on Trump’s rush to sign executive orders. There have been reports that Trump could sign up to 100 executive orders today, these could include deregulation for the energy and financial sector, including crypto. However, reports this afternoon, suggest that the president won’t implement a package of tariffs today, instead he is planning to sign a memo that will direct Federal agencies to evaluate U.S. trade relationships with China, Mexico and Canada, in particular."

"It will also direct the agencies to investigate other US trade deficits and unfair trading practices. Conspicuous by their absence are actual tariffs, which suggests that a programme of tariffs is still under debate by Trump and his team."

BORIS KOVACEVIC, GLOBAL MACRO STRATEGIST AT CONVERA:

"The euro moved strongly higher against the U.S. dollar today ($1.04) and is on track to record its best day of the year so far. The rise follows reports that President Trump will delay imposing new tariffs on his first day in office. This eased market concerns over trade tensions, sparking a risk-on sentiment that benefited the euro."

(Reporting by Harry Robertson, Dhara Ranasinghe, Karin Strohecker and Stefano Rebaudo; Compiled by Amanda Cooper; Editing by Dhara Ranasinghe)