Stocks retreated, giving back some of the strong gains of the previous session as they were buoyed by the nomination of fund manager Scott Bessant as Treasury Secretary, who is regarded by investors as a voice for Wall Street in Washington.
Besant’s appointment also led to a sharp decline in US yields as investors flocked to Treasury bonds, which had sent the dollar lower in the previous session.
The dollar was up 2% at 20.679 Mexican pesos by 0040 GMT on Tuesday and up 1% at C$1.4130. It strengthened 0.3% to 7.2681 yuan in offshore trading.
The US currency added 0.14% to 154.43 yen, while the euro fell 0.5% to $1.0444.
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Matt Simpson, senior market analyst at CitiIndex, said, “It almost looks like Trump wants to remind the markets of being in control, after nominating Scott Besant as Treasury second — the one-man markets that will chill Trump’s power.”
“With the Canadian dollar rising against the Mexican peso, markets are anticipating that this will affect Mexico the most.”
Sterling fell 0.35% to $1.2526, and the Aussie dollar fell 0.8% to $0.6453.
Australia’s stock benchmark fell 0.36%, a day after hitting a record high.
Japan’s Nikkei fell 1.3% and South Korea’s KOSPI fell 0.4%.
Chinese markets are set to open soon.
US S&P 500 futures pointed 0.3% lower following a 0.3% gain in the cash index overnight, while the small-cap Russell 2000 index also hit an all-time high.
Trump said on his first day in office he would impose 25% tariffs on all products from Mexico and Canada, and an additional 10% tariff on Chinese goods, citing concerns about illegal immigration and the illegal drug trade.
“It was only last month that Trump said that ‘the most beautiful word in the dictionary is tariff,’ so there really shouldn’t be any surprise in Trump’s intentions, just at the time of the comments,” Sean Callow said. FX Analyst at ITC Markets.
“The decline in trade-sensitive currencies is meaningful, and should continue in the near term.”
Bitcoin was steady around $94,111, finding its feet following a pullback from last week’s record high of $99,830. The token has benefited from speculation of an easier regulatory environment for cryptocurrencies under Trump.
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