The dollar dropped sharply on Monday following an announcement from an incoming U.S. administration official that President-elect Donald Trump would not impose new trade tariffs on his first day in office, easing concerns of an immediate tariff onslaught.
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Trump, who is set to take office later in the day, had previously pledged tariffs of 10% on global imports, 60% on Chinese goods, and a 25% surcharge on Canadian and Mexican products—measures that could disrupt trade, increase costs, and provoke retaliation.
As a result, the Canadian dollar, Mexican peso, and Chinese yuan all gained 1-1.5%, while the euro surged 1.5%, marking its biggest one-day rally against the dollar in over a year.
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The euro rose by more than 1% on Monday after the Wall Street Journal reported that Donald Trump would hold off on immediately increasing tariffs on U.S. trading partners upon being sworn in as president later in the day. According to the report, the president-elect plans to issue a memo directing agencies to examine trade deficits and unfair practices, but he will refrain from imposing tariffs on his first day in office.
The euro was last up 1.13%, trading at $1.0388, a jump from around $1.031 before the report was released at 1330 GMT (0830 ET). Meanwhile, the dollar index dropped by 0.91% to 108.34, and the pound gained 1.04%, reaching $1.2296.
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