{"id":55847,"date":"2025-02-03T04:08:53","date_gmt":"2025-02-03T04:08:53","guid":{"rendered":"https:\/\/innodebt.com\/?p=55847"},"modified":"2025-02-03T04:08:54","modified_gmt":"2025-02-03T04:08:54","slug":"dollar-surges-as-donald-trumps-tariffs-shake-markets","status":"publish","type":"post","link":"https:\/\/innodebt.com\/?p=55847","title":{"rendered":"Dollar surges as Donald Trump\u2019s tariffs shake markets"},"content":{"rendered":"<div>\n<p>Unlock the White House Watch newsletter for free<\/p>\n<p class=\"article__content-sign-up-topic-description\">Your guide to what the 2024 US election means for Washington and the world<\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=33ffe193-df55-4fc9-849b-96ccb0d50aaf&amp;newsletter-id=65b8fec772badb00166eafc6\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Donald Trump\u2019s tariffs shook markets on Monday, with the US dollar surging, Asian markets falling and US stock futures sliding as investors rush to assess how the levies will affect America\u2019s biggest trading partners.\u00a0<\/p>\n<p>The US dollar surged more than 1 per cent against a basket of currencies, sending the Canadian dollar to C$1.473 \u2014 the lowest level since 2003. Mexico\u2019s currency slid by more than 2 per cent to 21.15 pesos a dollar while the euro fell 1 per cent.<\/p>\n<p>US stock futures also fell sharply, with contracts tracking the benchmark S&amp;P 500 losing 1.7 per cent and those tracking the Nasdaq 100 sliding 2.3 per cent. European futures also fell, with the Euro Stoxx 50 down 2.6 per cent.<\/p>\n<p>Trump admitted in a post on Truth Social, his social network, that there would \u201cmaybe\u201d be \u201csome pain\u201d from his tariffs. \u201cBut\u2009.\u2009.\u2009.\u2009it will all be worth the price that must be paid,\u201d he wrote on Sunday.<\/p>\n<p>The US two-year Treasury yield rose by 0.05 percentage points to 4.25 per cent, while the 10-year yield fell by 0.02 percentage points to 4.52 per cent.<\/p>\n<p>In Asia, Japanese equities slid. The export-heavy Nikkei 225 fell 2.4 per cent while the Topix fell 1.9 per cent. The yen weakened 0.2 per cent against the dollar to \u00a5155.5. <\/p>\n<p>China\u2019s offshore renminbi, which trades freely, slid as much as 0.7 per cent to Rmb7.37 a dollar on Monday morning. Hong Kong\u2019s Hang Seng index was down 1.8 per cent, led lower by Chinese companies listed in the territory. Mainland China\u2019s stock market is closed until Wednesday.<\/p>\n<p>South Korea\u2019s Kospi benchmark shed 2.2 per cent and the won dropped 0.9 per cent against the dollar to Won1,468.8. In Australia the S&amp;P\/ASX 200 index fell as much as 2 per cent. <\/p>\n<p>Weaker currencies can help offset some of the tariffs\u2019 impact. <\/p>\n<p>\u201cThere was some optimism in the market that [tariff threats] were just for negotiation, but the market may have underestimated the determination of the Trump administration\u201d, said Jason Lui, head of Asia-Pacific equity and derivative strategy at BNP Paribas.<\/p>\n<p>The steep declines came after Trump on Saturday imposed 25 per cent tariffs on all imports from Mexico and Canada, with a lower 10 per cent levy for Canadian energy, and new 10 per cent tariffs on imports from China. He also last week threatened levies against the EU. <\/p>\n<p>Economists have warned that the tariffs are likely to accelerate inflation in the US, something that pushed up Treasury yields and the dollar following Trump\u2019s election in November. <\/p>\n<p>\u201cThe clearest implication is a stronger dollar,\u201d said Eric Winograd, chief economist at AllianceBernstein. \u201cA long dollar position is the cleanest, clearest expression of the trade war that is now being launched.\u201d<\/p>\n<p>\u201cThe currencies that will suffer the most are the ones against whom the tariffs are being imposed,\u201d added Winograd, noting that \u201cthere\u2019s a good case to be made that the equity market will suffer a little bit\u201d.<\/p>\n<p>Oil prices also climbed in early Asian trade, with international benchmark Brent crude up 0.6 per cent at $76.13 a barrel.<\/p>\n<p>George Saravelos at Deutsche Bank said the tariff announcements were \u201cat the most hawkish end of the protectionist spectrum we could have envisaged\u201d, and that markets needed to \u201cstructurally and significantly reprice the trade war risk premium\u201d.<\/p>\n<p>The Mexican peso has whipsawed in recent weeks as traders have scrutinised the new Trump administration\u2019s announcements for clues about how quickly and how extensive any new levies would be.<\/p>\n<p>\u201cIf the tariff stays on for several months the exchange rate will reach new historic highs,\u201d said Gabriela Siller, chief economist at Mexico\u2019s Banco Base, referring to the number of pesos per dollar. \u201cIf the tariff stays on it will be a structural change for Mexico\u2009.\u2009.\u2009. and Mexico could go into a profound recession that would take years to come out of.\u201d<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/33ffe193-df55-4fc9-849b-96ccb0d50aaf\" target=\"_blank\" rel=\"noopener\" rel=\"nofollow\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the White House Watch newsletter for free Your guide to what the 2024 US election means for Washington and the world Donald Trump\u2019s tariffs shook markets on Monday, with the US dollar surging, Asian markets falling and US stock futures sliding as investors rush to assess how the levies will affect America\u2019s biggest trading [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":55848,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-55847","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Dollar surges as Donald Trump\u2019s tariffs shake markets | Innodebt<\/title>\n<meta name=\"description\" content=\"Unlock the White House 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