Market Jitters: Dollar Rallies Amid Trump's Tariff Ambiguity

The dollar rebounded after a previous plunge, and stocks rose as Donald Trump returned to the White House. Markets reacted nervously to Trump's mixed signals on tariffs, with volatility affecting currencies like the Canadian dollar and Mexican peso. U.S. equities reflected relief, but concerns remain over potential tariff actions.

The dollar gained ground on Tuesday following a slip the previous day, as stocks rose with Donald Trump's return to the White House. The mixed messages on tariffs have made markets nervous about potential trade policies.

The Canadian dollar and Mexican peso felt the impact of market instability on both Tuesday and Monday. This volatility followed Trump's consideration of imposing 25% tariffs on neighboring countries starting February 1, causing noticeable declines in both currencies against the U.S. dollar.

U.S. stocks posted gains as they reopened after a public holiday, with investors relieved about the absence of immediate trade actions. However, concerns linger, with experts suggesting Trump's impact on global equity markets is significant.

(With inputs from agencies.)