U.S Dollar Mixed Amidst Tariffs Delay, Fed Appearances
The US dollar was mixed against its major trading partners early Tuesday—up versus the yen and pound, down versus the euro and Canadian dollar—before a busy schedule of data releases and appearances by Federal Reserve officials.
US President Donald Trump delayed the implementation Monday of tariffs on Canada and Mexico in exchange for concessions from both countries.
Hence, the markets are readjusting after Trump’s last-minute deals with Mexico and Canada which delayed tariffs by a month.
USD/CAD and USD/MXN are both trading below their Friday’s close.
US tariffs on China are due to come into effect today, and Beijing has already announced a retaliatory 10-15% duties on US energy exports and farm equipment, coming into effect on 10 February.
There are signals markets are pricing in a good chance that the US and China will also strike a deal and delay tariffs.
Atlanta Fed President Raphael Bostic is due to speak, followed by San Francisco Fed President Mary Daly and Fed Vice Chair Philip Jefferson. Only Jefferson votes on the Federal Open Market Committee in 2025.
The U.S. dollar index (DXY), a measure of the value of the greenback relative to a weighted basket of six major foreign currencies, was up 0.1% at 108.5 while the Canadian dollar and Mexican peso weakened, after Monday’s rebound.
The euro declined slightly, with Washington threatening that the European Union may be next in line for trade levies, which are widely expected to push up U.S. inflation, supporting the dollar by keeping U.S. interest rates higher for longer.
A quick summary of foreign exchange activity heading into Tuesday showed that USDEUR rose to 1.0322 from 1.0295 at the Monday US close and 1.0252 at the same time Monday morning. There are no Eurozone data on Tuesday’s schedule. The next European Central Bank meeting is scheduled for March 5-6.
GBPUSD fell to 1.2398 from 1.2403 at the Monday US close but was above a level of 1.2320 at the same time Monday morning. There are no UK data on Tuesday’s schedule. The next Bank of England meeting is scheduled for Thursday, when the BoE is expected to lower its target rate by 25 basis points.
USDJPY rose to 155.3514 from 154.7385 at the Monday US close and 154.5967 at the same time Monday morning. The Japanese money supply declined more than expected, according to data released overnight. The next Bank of Japan meeting is scheduled for March 18-19.
USDCAD fell to 1.4436 from 1.4569 at the Monday US close and 1.4681 at the same time Monday morning. There are no Canadian data on Tuesday’s schedule. The next Bank of Canada meeting is scheduled for March 12. 2025 Budget: Osun Govt Targets N109bn IGR
