The US dollar fell to three-month lows on Tuesday due to concerns about the impact of new tariffs and slowing economic growth. Despite the imposition of higher duties on goods from Canada, Mexico, and China, pressure from weak economic data outweighed the potential for currency strengthening.
At 12:01 Eastern Time (05:01 GMT), 25% US tariffs on imports from Canada and Mexico, as well as an increase in duties on Chinese goods to 20%, went into effect. In response, China announced the introduction of additional tariffs of 10-15% on American products starting March 10. Canada and Mexico also promised retaliatory measures in the coming days.
The dollar index (DXY) fell by 0.43% to 106.09 by 17:02 Moscow time, having previously dropped to 105.88—the lowest level since December 6. Investors shifted to safe-haven currencies: the Japanese yen and Swiss franc, which strengthened by almost 1%.
The Canadian dollar rose by 0.45%, reaching a level of 1.4471 per US dollar, while the Mexican peso traded at 20.76, losing 0.3% after falling to a low since February 3.
Economic uncertainty caused by new trade barriers has led to increased volatility in currency markets, and the weakening of the dollar is a reaction to the potential consequences for global trade.