The USD/JPY rises as trade tensions loom due to back-and-forth tariff rhetoric between Canada and the United States (US), which initially weighed on the US Dollar.
White House staff reaffirmed on Tuesday that a global 25% tariff on all steel and aluminum imported into the US would take effect on Wednesday, beginning at midnight Eastern Standard Time.
Within hours of his declaration via social media to impose a double tariff of 50% on Canadian steel and aluminum, US President Donald Trump has capitulated to pressures from both the market and within his cabinet, floating the suggestion that he may pivot away from his own double-tariff just hours after declaring his intent to double targeted tariffs on Canada on his Truth Social account.
Ontario Prime Minister Doug Ford agreed to suspend his announced export tariffs on Ontario-produced electricity bound for the US after US Secretary of Commerce Howard Lutnick agreed to emergency trade talks with Canada.
White House Press Secretary Karoline Leavitt addressed the press from the White House on Tuesday, following up on President Donald Trump's declarations of setting additional tariffs on Canada, to begin as soon as Wednesday.
There was no respite for the downside pressure in the Greenback on Tuesday, with the currency deflating to levels lasty seen in early October amid further effervescence around tariff and US recession concerns.
The Canadian Dollar roiled on Tuesday, falling roughly six-tenths of one percent against the Greenback at its lowest as markets weigh the latest evolution in US President Donald Trump’s self-styled trade war against Canada.
The Mexican Peso holds firm against the US Dollar and fails to gain traction even though the latter refreshes year-to-date (YTD) lows against a basket of six currencies, revealed the US Dollar Index (DXY).
The Dow Jones Industrial Average (DJIA) shed further weight on Tuesday, dropping nearly 700 points on the day, or 1.76% after United States (US) President Donald Trump vowed to heat up his own trade war with Canada.
The EUR/USD pair regained bullish traction on Tuesday after the European session, advancing past the 1.0900 zone and continuing its strong upward trend.
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