Australian dollar pares gains as Trump considers tariffs
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More news: The Australian dollar retreated after rallying overnight, as US President Donald Trump discussed imposing tariffs on Mexico and Canada as soon as 1 February.
The local currency is now trading at around 62.33 US cents, down 0.45%, having hit a two-high of 62.84 US cents overnight.
What they said: "We’re thinking in terms of 25% on Mexico and Canada, because they’re allowing vast numbers of people into the country," Trump said. "I think we’ll do it February 1."
Australian dollar rallies 1.5% as the US dollar tumbles
The news: The Australian dollar rallied overnight, along with other major currencies, after the US dollar reversed course after learning that US President Donald Trump's new administration will not immediately impose trade tariffs.
The numbers: The local currency is trading at 62.73 US cents at 8:25am AEDT, after rising to a two-week high of 62.84 US cents overnight, nearly 1.5% higher than its trading level in the previous session. It came after the US dollar tumbled more than 1%.
The context: The dollar index, which measures the US currency against six major peers, dived as much as 1.3% overnight, and was last down 1% at 108.26. It had hit a 26-month high of 110.17 last week.
That came after news reports said Trump would issue a broad trade memo that stops short of imposing new tariffs on his first day in office. Market participants have been expecting Trump to announce trade tariffs via executive orders, a move that could increase expectations for a large-scale campaign, rising inflation and higher-for-longer Federal Reserve policy rates.
