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Donald Trump's tariff swept the currency markets early on Monday, as the Canadian dollar and Mexican Bizo achieved great success with investors rushing to assess how fees affect the largest commercial partners in America.
The Canadian dollar was put pressure with the start of trading in the Asia Pacific region, as it decreased by 1.4 percent to 1.473 Canadian dollars against its American counterpart-the lowest level since 2003. Mexican bizo slipped by more than 2 percent to 21.15 against the dollar. The euro also lost 1 percent.
Trading sizes are usually very thin early in the session, which can exacerbate price movements.
The sharp decreases came after Trump imposed a 25 percent tariff on all imports from Mexico and Canada, with a 10 percent decrease in Canadian energy imposition, and new definitions of 10 percent on imports from China. Last week, the new fees against the European Union were threatened.
Economists have warned that the new customs tariff is likely to accelerate inflation in the United States, which is to pay the treasury and the dollar revenues after Trump was elected in November.
“The most implicit effect is a stronger dollar,” said Eric Winogerad, chief economist at Alliancebernstein. “The long dollar situation is cleaner and clearer of the trade war that is now launched.”
“The currencies that will suffer more than those that the customs duties are imposed against,” Winogra added, noting that “there is a good situation that must be presented that the stock market will suffer a little.”
George Saravilus in Deutsche Bank said that the customs tariff advertisements “were at the most valuable party to the protectionist spectrum that we could imagine”, and that the necessary markets to “reinforce the risk of the commercial war risks.”
The Mexican Peso has wandered in recent weeks as traders have audited the new Trump administration ads about evidence about the extent of the speed and how it will be any new fees.
“If the customs tariff remains for several months, the exchange rate will reach new historical levels,” said Gabriella Siller, chief economist at the Banco base in Mexico, referring to the number of bizo for each dollar. “If the tariff remains on it, it will be a structural change for Mexico. Mexico can enter a deep stagnation that will take years to get out of it.”
Compared, Mexico BBVA analysts said they believed that the definitions are unlikely to last long. However, if they remain in place, he said they have a “very negative” effect on investing in Mexico and its competitiveness.
