The dollar partially rebounded on Tuesday as President Donald Trump suggested tariffs on Canada and Mexico could be imposed by February 1, with rates potentially around 25%.
Trump also mentioned universal tariffs but ruled out immediate implementation.
On Monday, the dollar had fallen sharply after Trump’s initial actions included no concrete tariff measures, with officials signaling any taxes would be gradual. A subsequent trade memo focused on addressing trade deficits.
The dollar gained 0.8% against the Canadian dollar to 1.4429 CAD and 1.2% against the Mexican peso. The dollar index rose 0.6% to 108.58, recovering from a 1.2% drop on Monday.
The euro eased to $1.0362 as concerns grew over potential tariffs targeting the EU’s trade surplus with the U.S. Against the yen, the dollar remained steady at 155.68, while the yuan saw minor movement, with the offshore rate at 7.2896.
Markets are closely monitoring trade and monetary policy shifts as Trump signals a return to aggressive trade measures and the Bank of Japan considers a rate hike this week.
