Around 11:30 a.m., the American currency rose 0.57% against the euro, to $1.0357. The greenback also crushes the Mexican peso, which sinks by 1.23%, to 20.7610 pesos per dollar.
The dollar welcomes Tuesday the first salvo of presidential decrees signed by Donald Trump on his first day in power, which strongly penalize the currencies of Mexico and Canada, the American president’s first targets.
As soon as he was inaugurated, the leader declared a state of emergency at the border with Mexico against immigration, pardoned 1,500 attackers of the Capitol, and signed the withdrawal of the United States from the Paris agreement and the WHO– so many strong measures that reinforced investor confidence that he would deliver on his campaign promises, including that of a new protectionist trade policy.
The new president thus affirmed on Monday his intention to impose customs duties of 25% on Canadian and Mexican products from February 1, which could increase inflation in the United States and leave less margin for the Federal Reserve (Fed) to lower its rates in the coming months.
Enough to further support the American currency, which, around 11:30 a.m. in Paris, rose by 0.57% against the euro, to 1.0357 dollars.
The greenback also crushes the Mexican peso, which sinks by 1.23%, to 20.7610 pesos per dollar, and the Canadian currency, falling by 0.80%, to 1.4425 Canadian dollars per dollar. “buck”, a nickname for the American currency.
“There is a clear dichotomy in the White House’s approach to tariffs”: the market believes that “Mexico and Canada will be the first targets, while Trump is expected to take a more progressive and moderate stance on regard to China,” underlines Kathleen Brooks, analyst at XTB.
-According to her, this explains why the Chinese yuan emerged relatively unscathed from the presidential inauguration.
The pound fell heavily against the greenback, and lost 0.59% on Tuesday to 1.2254 dollars.
After the publication on Tuesday of a slightly increasing unemployment rate in the United Kingdom, at 4.4% in the three months ended in November, “the market is focusing on the fall in the number of jobs”, which reinforces “the fears of recession,” said Kathleen Brooks.
Struggling, the British economy could need support from the Bank of England (BoE) and investors consider a reduction in its key rates likely at its next meeting in February.
Driven on Monday by the prospect of a second pro-crypto mandate, bitcoin for its part is taking a break. It is still moving in the green (+0.42%), at 102,933.56 dollars, below its record from Monday, at almost 110,000 dollars.
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