NEW YORK: The US dollar gained on Monday after President Donald Trump pledged 25% tariffs on all imports of steel and aluminium, while the Canadian dollar was among the worst performers.
Canada is a major exporter of steel and aluminium to the US, along with Brazil, Mexico, South Korea and Vietnam, according to government and American Iron and Steel Institute data.
The yen also dipped on concerns that Japan could also face tariffs.
There is “a little bit of catch-up and also this idea that maybe Japan was going to escape the worst of it and now could be hit with the steel and aluminium tariffs,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
Japanese Prime Minister Shigeru Ishiba expressed optimism on Sunday that his country could avoid higher US tariffs, saying Trump had “recognised” Japan’s huge investment in the US and the American jobs that it creates.
Trump said on Sunday he will introduce new 25% tariffs on all steel and aluminium imports into the US, on top of existing metals duties.
It came after he said on Friday he planned to announce reciprocal tariffs on many countries by Monday or Tuesday.
The US currency gained overnight before paring its gains in early New York trading.
“This is still very early days,” said Chandler. “The market’s sort of just sort of chopping around rather than really directional right now.”
The Canadian dollar weakened 0.3% versus the greenback to C$1.43 per US dollar.
The greenback strengthened 0.17% to 151.65 Japanese yen.
The dollar index rose 0.17% to 108.25.
The euro dropped 0.18% to $1.0308. The US is the second largest market for EU steel exports. Sterling weakened 0.27% to $1.2376.
This week’s main US economic focus will be consumer price inflation data for January due on Wednesday.
It is expected to show that both headline and core consumer prices rose by 0.3% last month, for an annual gain of 2.9% and 3.1%, respectively, according to economists polled by Reuters.
Federal Reserve Chairman Jerome Powell is also due to testify before Congress on Tuesday and Wednesday.
“I think Powell is going to tell Congress the same thing basically he told everybody else, with the economy still in a good place, and that is above-trend growth, that the Fed has time,” said Chandler. “The Fed can be patient while the restrictive monetary policy helps bring inflation back down to target over time.”
In cryptocurrencies, bitcoin gained 1.48% to $97,435.03.
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