SINGAPORE- The dollar rose on Tuesday after falling to its lowest in more than two months at the start of the week, buoyed by safe-haven flows after US President Donald Trump said tariffs on Mexico and Canada would proceed as planned.
The stronger dollar in turn left the euro off a one-month high at $1.0461, with future gains in the single currency likely to hinge on how soon a coalition government can be formed in Germany following the election victory of the country’s conservatives.
Trump on Monday said that tariffs on Canadian and Mexican imports are “on time and on schedule” despite efforts by the countries to beef up border security and halt the flow of fentanyl into the US ahead of a March 4 deadline.
Many had hoped the top two US trading partners could persuade Trump’s administration to further delay tariffs that would apply to over $918 billion worth of US imports from the two countries, from autos to energy.
His comments spurred a rush to safety assets like gold and US Treasuries, with the dollar also a beneficiary of some of those risk-off moves.
Sterling drifted from Monday’s two-month high and last traded 0.06 percent lower at $1.2618 in the early Asian session, while the Aussie fell 0.17 percent to $0.6339.
The New Zealand dollar eased 0.13 percent to $0.5725, while the dollar index was steady at 106.75, rebounding from a more than two-month trough of 106.12 hit in the previous session.
While the dollar has fallen some 3 percent from its January peak following a raft of weaker-than-expected US economic data that stoked worries over its growth outlook, sustained losses have been short lived due to lingering concerns over tariffs.
