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Donald Trump’s tariffs shocked markets early on Monday, with the Canadian dollar, the future of Mexican and future shares of US shares while investors rush to appreciate how taxes will affect America’s largest trading partners.
The Canadian dollar fell under pressure as trading began in the Asia-Pacific region, falling 1.4 percent to $ 1,473 C against its US-lower counterpart since 2003. Dollar. The euro also lost 1 percent.
The future of US shares also fell sharply, with contracts conveying the S&P 500 standard losing 1.8 percent and those following 100 slides 2.6 percent.
Trading volumes are usually very thin at the beginning of the session, which can worsen price movements.
The steep decline came after Trump on Saturday imposed 25 percent fees for all imports from Mexico and Canada, with a lower 10 percent tax on Canadian energy, and new 10 percent tariffs from China. He also threatened new taxes against the EU last week.
Economists have warned that new tariffs are likely to speed up inflation in the US, something that prompted treasury yields and the dollar after Trump’s election in November.
“The clearest implication is a stronger dollar,” said Eric Winograd, the economist chief at Alliancebernstein. “A long position of the dollar is the cleanest, clearest expression of the trade war that is now starting.”
“The coins that will suffer the most are those against whom tariffs are imposed,” Winograd added, stressing that “there is a good opportunity to be made that the net capital market will suffer a little.”
Petroleum prices also climbed Sunday evening, with an international standard raw Brent standing 1.5 percent to nearly $ 77 per barrel.
George Saravelos at Deutsche Bank said the tariff notifications were “at the most outrageous end of the protectionist spectrum we could have predicted”, and that markets had to “reproduce the premium of trade war” structurally and significantly.
The Mexican pesso has deceived the last few weeks after traders have reviewed the new Trump administration announcements on how fast and how wide any new tax would be.
“If the fee has been for several months, the exchange rate will reach new historical levels,” said Gabriela Siller, the economist chief at the Banco base of Mexico, referring to the Peso Dollar number. “If the fee stays there will be a structural change for Mexico. . . And Mexico could go into a deep recession that would take years to come out. “
By comparison, BBVA Mexico analysts said they thought it was unlikely the tariffs to last long. However, if they were to stay in the country, he said they would have a “very negative” impact on investing in Mexico and his competition.
