Yesterday we could see Donald Trump sign off the agreement to incorporate tariffs on Canada, Mexico and China. Canada and Mexico will now face 25% tariffs on all exported goods to the US. China on the other hand were expected to face tariffs off 10%, which now has been doubled up to 20%. This is going to cause major disruptions to earlier trading allies and shake up the international trade. We heard straight away from both Canada and China of retaliation on tariffs being put in place for incoming US goods. China has said that it will be focused on the agriculture sector of US goods, while Canada initially looking at alcoholic beverages like beer, bourbon and wine and also home appliances. Mexico’s president Claudia Sheinbaum is expected to speak Tuesday morning and reveal her view and approach of potential upcoming tariffs implemented on US goods.
Markets did react to this yesterday and we saw both Canadian dollar and Mexican peso reaching low-points against a number of different currencies. After announcements of upcoming tariffs now taking place on US goods, we have seen the USD drop off, seeing both GBP and EUR taking advantages breaking through psychological levels.
Donald Trump have mentioned that he is going to speak again later today and that it will be the biggest reveal so far in his second presidential campaign. With markets being in a good position for USD-purchases whether your base currency is in EUR or GBP, we don’t know for certain what the topic of his press conference will be and depending on the tone and theme its very difficult to predict the outcome for USD-pairs.
GBP/EUR 1.2093 GBP/USD 1.2706 GBP/AED 4.6713
GBP/AUD 2.0438 GBP/CHF 1.1332 GBP/CAD 1.8337
GBP/NZD 2.2607 EUR/USD 1.0499 GBP/ZAR 23.6141