SINGAPORE (Reuters) – The U.S. dollar rose broadly against major rivals on Tuesday after President-elect Donald Trump said he would sign an executive order imposing a 25% tariff on all products shipped from Mexico and Canada. enter the United States.
The dollar rose more than 2% against the Mexican peso and 1% against its Canadian counterpart.
The dollar has fallen behind in recent days as US Treasury markets cheered Trump’s choice of hedge fund manager Scott Bessent as US Treasury Secretary.
“It’s almost as if Trump wants to remind the markets who’s in control after nominating Scott Bessent as Treasury Sec – a man expected to cool Trump’s power,” said Matt Simpson, senior market analyst at City Index .
“But with the Canadian dollar rising against the Mexican peso, markets are anticipating this will hit Mexico the hardest.”
While traders saw Bessent as an old Wall Street hand and fiscal conservative, he has also openly favored a strong dollar and supported rates.
The dollar index, which measures the U.S. currency against six rivals, was last at 107.37. The euro fell 0.6% to $1.043175, while sterling fell 0.4% to $1.2516.
The eurozone’s single currency took a hit on Friday as European manufacturing surveys showed broad weakness while US surveys surprised on the high side.
On China, the president-elect said Beijing is not taking strong enough action to stem the flow of illegal drugs crossing the border from Mexico into the U.S. by curbing the export of ingredients for drug production.
“Until they stop, we will charge China an additional 10% tariff, on top of all additional tariffs, on all of their many products entering the United States of America,” Trump said in a social media post.
China has previously denied the allegations.
The Australian dollar fell 0.75% to $0.64555, while the New Zealand dollar hit a one-year low, last at $0.58075.
As for cryptocurrencies, bitcoin was trading at $93,577, well below the record high of $99,830 it reached over the weekend.
Bitcoin has seen profit-taking before the symbolic $100,000 mark, rising more than 40% since the US election earlier this month on expectations that Trump will ease the regulatory environment for cryptocurrencies.
(Reporting by Ankur Banerjee in Singapore; Editing by Christopher Cushing)
