BUZZ-COMMENT-Will Trump's bark be worse than his bite? USD wants to know
Jan 2 (Reuters) - The early year focus for the foreign exchange market will be the size and scope of any new trade tariffs imposed by Donald Trump following his Jan. 20 inauguration.
The imposition of fresh tariffs on U.S. imports from China, Mexico, Canada and the European Union might help the USD index build on its 2024 strength - when it rose by 6.6%.
In contrast, the greenback may cede some of its gains since Trump's Nov. 5 election victory if he pulls his tariff punches.
On Nov. 25, Trump pledged to impose a 25% tariff on imports from Canada and Mexico - a threat which sent the CAD and MXN plunging against the USD.
The U.S. President-elect's same day threat to impose "an additional 10% tariff, above any additional tariffs" on China also hurt the yuan - which hit a 14-month low against the USD as 2025 got underway.
On Dec. 20, Trump threatened the EU with tariffs unless it steps up U.S. oil and gas imports - a threat which depressed EUR/USD to an EBS low of 1.0344 (a low tested on New Year's Eve).
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(Robert Howard is a Reuters market analyst. The views expressed are his own)
((robert.howard@thomsonreuters.com))
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