SINGAPORE — The euro fell to a three-week low early on Monday while the Mexican peso also came under pressure after US President Donald Trump threatened to impose a 30 percent tariff on imports from two of the largest US trading partners beginning August 1.
Trump on Saturday announced the latest tariffs in separate letters to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum that were posted on his Truth Social media site.
Both the European Union and Mexico described the tariffs as unfair and disruptive, while the EU said it would extend its suspension of countermeasures to US tariffs until early August and continue to press for a negotiated settlement.
Reaction in the currency market to Trump’s latest tariff threats was largely muted in Asian trade, though the euro did slip to a roughly three-week low early in the session.
The single currency later regained some ground and last traded 0.12 percent lower at $1.1679.
Against the Mexican peso, the dollar rose 0.25 percent to 18.6699.
Elsewhere, however, the dollar made limited gains, with sterling down just 0.07 percent at $1.3481, while the Japanese yen rose 0.1 percent to 147.28 per dollar.
Investors have grown increasingly desensitised to Trump’s slew of tariff threats, with his latest upheaval in the global trade landscape doing little to prevent US stocks from scaling record highs and offering just a slight boost to the dollar.
“It seems like financial markets have become insensitive to President Trump’s tariff threats now, after so many of them in the past few months,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia.
“Judging by the limited market reaction, markets might think that the latest threat from Trump is actually a manoeuvre to extract more concessions.”
In other currencies, the Australian dollar fell 0.14 percent to $0.6565, while the New Zealand dollar slid 0.4 percent to $0.5984.
Outside of tariff news, Trump on Sunday said that it would be a “great thing” if Federal Reserve Chair Jerome Powell stepped down, again threatening to undermine the central bank’s independence as he called for interest rates to be lowered.
Traders could get a better clue on the future path for US rates when inflation data for June comes due on Tuesday, where expectations are for US consumer prices to have picked up slightly last month.
