U.S. Dollar Gains Amid Tariff Pledges

By Karen Brettell

NEW YORK (Reuters) – The U.S. dollar gained on Monday after President Donald Trump pledged 25% tariffs on all imports of steel and aluminum. The Canadian dollar, Japanese yen, euro, and sterling weakened amid concerns about the impact of these new trade levies.

Canada is a major exporter of steel and aluminum to the U.S., along with Brazil, Mexico, South Korea, and Vietnam, according to government data and the American Iron and Steel Institute.

The yen also dipped on concerns that Japan could be affected by the tariffs. Marc Chandler, chief market strategist at Bannockburn Global Forex in New York, said there was some catching up and concern that Japan might not escape the worst of it.

Japanese Prime Minister Shigeru Ishiba expressed optimism on Sunday, noting that Trump had “recognized” Japan’s significant investments and the American jobs they create. Trump stated he would introduce new 25% tariffs on all steel and aluminum imports into the U.S., in addition to existing duties.

This announcement followed Trump’s indication that he planned to announce reciprocal tariffs on several countries. The Canadian dollar weakened by 0.11% against the U.S. dollar, reaching C$1.4307 after a peak of $1.4379. In contrast, the U.S. dollar strengthened by 0.38% to 151.97 Japanese yen, and the dollar index rose 0.21% to 108.31.

The euro dropped 0.2% to $1.0306, as the U.S. is the second-largest market for EU steel exports. Sterling weakened by 0.36% to $1.2364. Britain is still assessing the details of Trump’s proposed tariffs and will engage with the Trump administration as necessary.

The U.S. is Britain’s second-largest steel export market, following the European Union. This week’s main focus will be U.S. consumer price inflation data for January, expected to rise by 0.3% monthly, marking annual gains of 2.9% and 3.1% respectively, according to economists polled by Reuters.

Federal Reserve Chairman Jerome Powell is expected to testify before Congress on Tuesday and Wednesday. Chandler suggested that Powell would reiterate that the economy is still performing well, allowing the Fed the patience to address inflation over time.

Additionally, a New York Fed survey indicated stability in the public’s near-term inflation expectations as of January.

In cryptocurrencies, bitcoin gained 1.42% to $97,378.84.