During today's Asian trading, the US dollar rose against major currencies, reacting to the news that Donald Trump intends to impose tariffs on imports of goods from Mexico, Canada and China, which increased fears about a trade war. Trump has promised that he would impose a 25% tariff on all products from Mexico and Canada, and an additional 10% tariff on goods from China.
The focus also remained on Donald Trump's decision to appoint hedge fund manager Scott Bessent to the post of US Treasury Secretary. Bessent is fiscal conservative, and at the same time has favored a strong dollar and supported tariffs.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.28% to 107.11. Experts said that so far market participants have been focused on Trump's positive policy for the market such as tax cuts and deregulation, but perhaps he will be able to implement his more complex policies faster, such as tariff increases. Tariffs should have a positive impact on the US dollar and put pressure on currencies that are subject to duties as the trade balance changes. At the same time, some analysts believe that tariff threats can be considered as a negotiating tactic.
The Australian dollar fell by 0.35% against the US dollar. Earlier today, it reached its lowest level since August 5 amid Trump's statements regarding tariffs on China, which is Australia's largest trading partner. Investors are also preparing for tomorrow's release of Australian inflation data for October. Economists expect CPI growth to accelerate to 2.3% per annum from 2.1% per annum in September (the lowest figure since July 2021).