The Canadian dollar and the Mexican peso fell to their lowest levels in a month on Tuesday as concerns over a potential trade war turned into reality after U.S. President Donald Trump followed through on his threats to impose tariffs on Canada, Mexico, and China.
اضافة اعلان
The new tariffs, which Trump imposed at 25% on goods coming from Mexico and Canada, as well as a 20% increase in tariffs on Chinese goods, came into effect at 09:01 AM Abu Dhabi time.
Shortly afterward, China announced it would impose additional tariffs ranging from 10% to 15% on some U.S. imports starting on March 10.
The Canadian dollar dropped to 1.4508 USD in Asian trading hours after hitting a one-month low of 1.45415 USD on Monday. The Mexican peso also declined by more than 0.5%, reaching 20.821 against the dollar, its lowest level since February 3.
Faso Menon, head of investment strategy at OCBC, stated, “Trump’s decision to impose tariffs on Mexico and Canada has turned fear into reality.”
How Trump's Decision Affects the Markets Menon explained that the tariffs would shake markets, as investors feared that this move could lead to rising inflation expectations and a slowdown in U.S. growth, given that a large portion of U.S. imports come from these countries. He added, “There’s also the additional risk of Canada and Mexico retaliating, and if that happens, Trump might escalate further, causing more anxiety.”
Canada has already announced that its counter-tariffs on the U.S. will begin at 05:01 AM Abu Dhabi time on Tuesday.
The Mexican Ministry of Economy stated that the country’s response, led by President Claudia Sheinbaum, would be announced in a press conference scheduled for Tuesday morning in Mexico City.
Meanwhile, the Japanese yen rose to 149 per dollar, hovering near its four-month high, which it touched last week.
Dollar Against Other Currencies The Chinese yuan remained stable against the dollar, while the euro fell to 1.04795 USD after a sharp recovery in the previous session, with traders remaining cautious in hopes of reaching a peace agreement to end the war in Ukraine, as European leaders proposed a ceasefire. The British pound dropped 0.12% to 1.2686 USD. (Agencies)
