Dollar Rallies on Tariffs, Loonie Hits 22-Year Low
The dollar rallied against most of its Group-of-10 peers after US President Donald Trump imposed tariffs on three of the nation’s largest trading partners.
The Bloomberg Dollar Spot Index is up by 0.9%, the most since Dec. 18, trimming an earlier advance of 1.3%; one-month risk reversals rise to their most bullish levels in more than two years as dollar bulls find fresh stimulus
Trump ramped up his tariff threats to the European Union while saying he would hold separate calls on Monday morning with Canadian Prime Minister Justin Trudeau, as well as with the Mexican leadership, after announcing 25% tariffs on the US neighbors and top trading partners. The levies are set to take effect on Tuesday, barring a last-minute deal
Money markets price 37.5bps of reductions this year, down from 45bps on Friday; US 10-year yield rises 7bps to 4.27%.
USD/CAD rises as much as 1.7% to 1.4793, its highest level since April 2003; it’s trimmed the advance to 1% as it heads for its sixth daily gain
DTCC data show loonie options volumes are eight times greater the recent average during the London trading sessions
EUR/USD falls as much as 2.1% to 1.0141 before halving losses; sizable stops filled after the Asia open, 1.02 barriers triggered and forced short-gamma covering, Europe-based traders say
EUR/GBP is down an eighth day, its longest losing streak since 2021; the cross is down 0.4% at 0.8324
USD/JPY erases gains to trade 0.1% lower at 155.11; it initially fell as the yen attracted haven flows, only to be supported from cross flows as the greenback rallied across the curve, and eventually came under steady pressure during London hours.
Source : Bloomberg
