London (Reuters) – US President Donald Trump’s ability to quickly impose, and then delay, tariffs on the top trading partners left the world markets swinging in one direction and then another.
Last weekend, for example, he announced caring tariffs in Canada, Mexico and China, and then announced one -month delays for Canada and Mexico on Monday.
These moves show that the risk of a global trade war that damages with economic growth and stimulates inflation remains high.
“The warrior shot released by the White House confused the world in general,” said Tina Fordham, founder and geopolitical strategist at Fordham Global Foresight.
“Who is next? How will we know will we be at the sharp end of us tariffs? And how to react? To gain or reciprocate?”
Here’s where some hard -affected markets stand almost a week after Trump started his salvo:
1/ earthquake Loonie
The Canadian dollar, was in shooting, briefly hitting over a 20-year lowest before bounced the tariff delay, leading to the biggest one-day momentum in almost five years.
But a return for the so -called Loonie may not last because it remains a chance of 25% tariff.
Even if tariffs are avoided, uncertainty could strive for business activities, holding Canada on the path of cutting speed.
Loonie finished January the fifth month, and the longest loss since 2016; Volatility of the currency remains high. CBA forecasts a dollar/Canadian dollar to 1.52 to the third quarter, from 1,44 now.
2/ vaporious peso
The volatility has been built into the Mexico currency since last year, when it lost almost a fifth of its value compared to the dollar.
Tariff threats, direct and indirect, noted that Peso is falling as much as 2.2%this year and also gets as much as 3.5%.
In a scenario of 25% of tariffs, analysts on Wall Street expect the Mexican economy to fall into a recession. Peso, who ended in January at 20,678 for the dollar, advocates as much as 22 or further dollar towards the BBVA.
This would mean weakening more than 7% from current levels.
Peso has not traded more than 22 since November 2021.
3/ Euro Double Whammy
Trump says the European Union is next in line for tariffs, holding the euro under pressure.
He slid 5% of the US elections, one of the biggest downs among the main currencies, briefly reached $ 1,0125 briefly on Monday – the lowest since the end of 2022.
Nearly one -third of the strategist surveyed by Reuters believes that the EURO could fall to $ 1 within a year, as trade uncertainty harms the economy.
Now he is the most important trade partner from the EU, with $ 1.7 trillion in two-way goods and services trade.
