Investing.com– The Canadian dollar and Mexican peso fell Tuesday after U.S. President Donald Trump’s inauguration, during which he announced plans to impose new tariffs on imports from Canada and from Mexico.
Trump said he was mulling additional tariffs of around 25% that could be announced on Feb. 1, but provided no further details.
In response to tariff threats, the Mexican peso and Canadian dollar fell sharply against the U.S. dollar.
The pair of Mexican pesos jumped 1.2% to 20.7126 pesos at 0443 GMT. The Canadian dollar pair rose 0.8% to 1.442 Canadian dollars.
The declines reflect investors’ concerns about the potential negative impact of these tariffs on the economies of the two countries, which have close trade ties with the United States.
The , which measures the greenback against a basket of major currencies, rose 0.2%, recovering from previous losses. This rebound was supported by anticipated tariffs, as well as expectations of a tightening of US monetary policy.
Market analysts noted that the proposed tariffs could disrupt supply chains and trade flows, leading to increased volatility in foreign exchange markets. The energy sector, in particular, could face significant challenges, given Canada’s role as a major supplier of oil to the United States.