Finance
Dollar advances after White House reiterates Trump tariff threats
Published by Global Banking & Finance Review®
Posted on January 31, 2025
4 min readLast updated: January 26, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on January 31, 2025
4 min readLast updated: January 26, 2026
The US dollar rose against major currencies as Trump reiterated tariff threats. The Canadian dollar weakened, while the Mexican peso edged higher.
By Chibuike Oguh and Amanda Cooper
NEW YORK (Reuters) -The U.S. dollar advanced against major currencies on Friday, while the Canadian dollar weakened and the Mexican peso edged higher after the White House reiterated that President Donald Trump will impose tariffs on Saturday.
Reuters had earlier reported, citing sources familiar with the tariff deliberations, that Trump would announce tariffs on Canadian and Mexican imports on Saturday but delay collection of the duties until March 1 and offer a limited process for certain imports to be exempted.
White House spokesperson Karoline Leavitt denied the report, calling it "false", adding that tariff duties would be published on Saturday and would take effect immediately.
Earlier on Friday, U.S. Commerce Department data showed that the Personal Consumption Expenditures (PCE) Price Index rose 0.3% last month, the largest increase since last April, amid a surge in consumer spending, suggesting the Federal Reserve would probably be in no hurry to resume cutting interest rates.
"It's very much tariffs and the administration that's driving this over-dollar-strength move; one of the biggest challenges is that the stronger dollar has been one trade that has sustained itself if you wanted to put out a theory that there's a Trump trade out there," said Marvin Loh, senior global market strategist at State Street in Boston.
"The dollar trade is one of the most overpositioned at this point. It does need a catalyst to continue to move up. But the threats and/or actions where we get to see tariffs over the weekend is what's driving the story now," Loh said.
The U.S. dollar advanced 0.12% against the Canadian dollar , rebounding from a slight decline following the Reuters report. The currency is still trading near five-year highs at C$1.451 and notched a weekly gain of nearly 1.1%.
The Mexican peso was up 0.17% at 20.728 per dollar. The currency recorded its worst weekly performance since October.
The dollar strengthened 0.54% to 155.13 against the Japanese yen, notching three straight weeks of gains. Against the Swiss franc, the dollar added 0.1% to 0.9016, gaining 0.5% for the week and snapping two consecutive weeks of losses.
The euro dipped 0.3% to $1.0367. It recorded a 1% weekly decline, the biggest loss since December 30. For the month, it was up 0.23% - the biggest gain since September last year.
Bank of Japan Governor Kazuo Ueda said the central bank must maintain loose monetary policy to ensure underlying inflation gradually accelerates toward its 2% target. Data on Friday showed core inflation in Tokyo hit 2.5%, the fastest annual pace in nearly a year.
The European Central Bank cut interest rates on Thursday and policymakers left the door open for another cut in March, as concerns over lacklustre economic growth supersede worries about persistent inflation.
The Federal Reserve, meanwhile, kept rates steady this week and Chair Jerome Powell said there would be no rush to cut them again, though he also implied there was still scope for easing with rates being "meaningfully" above neutral.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.31% to 108.42. It gained 0.93% for the week, snapping two straight weeks of losses.
"We were expecting maybe some volatility around the data releases this morning, the U.S. PCE and other things; but they were really in line and not much to write home about," said John Velis, FX and macro strategist at BNY in New York.
"It just seems like, based on what happened yesterday afternoon in the White House, that traders are looking not to take big risks going into the weekend because obviously tomorrow's February 1st," Velis added.
(Reporting by Chibuike Oguh in New York. Additional reporting by Rae Wee in Singapore. Editing by Marguerita Choy)
The article discusses the US dollar's rise following Trump's tariff threats and their impact on global currencies.
The Canadian dollar weakened against the US dollar following the tariff threats.
The Federal Reserve kept interest rates steady, indicating no rush to cut them soon.
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