After starting trading early yesterday with a dismal performance, the US dollar returned to showing recovery at the opening of Tuesday.
The situation was a little tense in the market when Donald Trump, who will lead the White House after this, threatened Canada and Mexico to impose a 25% tariff on all imported goods to the United States (US).
In a statement shared on his social media, Trump said that after taking office as President on January 20, the action would be one of the 'executive orders' where he would sign all the necessary documents for the tariff.
Trump will also impose an additional tariff on China of 10%.
The Canadian dollar was clearly affected by the development, seeing a significant depreciation in value in early trading in the Asian session this morning (Tuesday).
Previously, the market was a little cautious when Trump nominated investment fund manager Scott Bessent for the position of US Treasury Secretary, who is seen as being his advisor on the market.
The US dollar, which had previously retreated from a 2-year high it reached at the end of last week, is likely to return to its track again.
Developments regarding central bank monetary policy, Federal Reserve (Fed) Minneapolis President Neel Kashkari expressed his view yesterday that the central bank is still appropriate to consider another interest rate cut at the December meeting.
Also supportive was Chicago Fed President Austan Goolsbee who did not see the Fed stopping interest rate cuts at this time.
In the New York session tonight, US consumer confidence survey data will be watched along with new home sales data.
Investors are now starting to be wary of the uncertain market sentiment situation that could affect current trading risks.
