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31 Jan 2025

Dollar Slips On Potential Deferral of Tariff Threats

The US dollar is retreating against the Mexican peso and Canadian dollar after Reuters reported that the Trump administration plans to implement tariffs on both of its biggest trading partners on March 1—a month later than had been previously threatened. Markets see this timeline providing room for Mexican and Canadian leaders to satisfy the president’s demands on border controls, potentially avoiding extremely-negative outcomes for all three economies. This news item should be taken with a Truth Social-sized grain of salt: the president has walked back several similar articles in recent weeks, indicating in each case that he does not intend...

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Tariff Threats Offset Signs of Improving Fundamentals

The US dollar looks set to close out the week with its strongest performance since the middle of November after President Donald Trump reiterated his threat to impose tariffs on Canada and Mexico by tomorrow. The loonie and peso are both down more than a full percentage point on the week, North American equity indices are setting up for a subdued open, Treasury yields are pushing higher, and high-beta currencies remain on the defensive. Inflation pressures in the US remained stable at the end of last year. Data released by the Bureau of Economic Analysis this morning showed the core...

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