Forex Today: Mexico and Canada Yield to Trump’s Tariff Pressure, Securing Temporary Relief

Forex Today: Mexico and Canada Yield to Trump’s Tariff Pressure, Securing Temporary Relief

Mexico and Canada both made the necessary concessions US pressure to allow the US to lift the tariffs for one month. An extension of the agreement could be discussed.

Market news continues to be dominated by tariffs. The USA has imposed new tariffs against Mexico (25 percent), Canada (25% except for energy, which is 10 percent), and China (10 percent). The new tariffs have led to large movements in the direction of the US Dollar against the Canadian Dollar and the Mexican Peso. Yesterday, however, first Mexico and the next day, Canada made announcements of temporary agreements with Canada and the Trump administration. The Trump administration has agreed to halt the tariffs for a month while negotiations continue to determine possibilities of a more considerable agreement that will see tariffs reduced in exchange for concessions the US administration considers beneficial for the USA. The announcement of these temporary agreements has seen both Loonie and the Peso achieve significant gains, which more than compensated for all their losses from the beginning of the week. Since the opening of the week:
1. USD / CAD has a lower value of 1.8 percent.
2. USD/MXN is lower by 1.8 percent.
China responded not by striking the deal but by imposing its own tariffs on the new US imports. So, the tariffs imposed between the two countries are likely to be in place, which has caused a decline in global stocks and the cost of crude Coconut by a few dollars. It’s not a surprise that the dispute over tariffs that is brewing between the USA, Mexico, and Canada affected the stock markets across the globe quite severely, with the benchmark S&P 500 Index falling by nearly 160 points at one time in the day trading until the market recovered their losses following announcements of the agreements.
President Trump continues to threaten to impose tariffs on the EU, but the currency pair EUR/USD closed yesterday on the same day.
Most of the risky assets lost value on Monday after the announcement of the tariff deal.
Gold was traded on the market yesterday at a record high, above $2,830 for an ounce.
Futures on Coffee have continued to follow their bullish long-term trend yesterday, gaining to a record-breaking price. Trend traders will be keen to invest in Coffee. Even though Coffee futures can be costly, Retail traders and investors can be exposed to Coffee through the COFF ETF. However, US taxpayers must be aware that this could be a PFIC that can be used for tax purposes.
Futures on corn remain in a long-term bullish trend, and most trend traders prefer to position long in this market.
Yesterday’s publication of US ISM Manufacturing data was slightly higher than expected.
There will be a release later in the day of:
- US JOLTS Job Openings
- New Zealand Unemployment Rate Data