Trump's Tariff Talk Triggers Dollar Rebound
The U.S. dollar rose after President Trump hinted at imposing tariffs on Canada and Mexico. The dollar's recovery follows a sharp drop due to uncertainty over tariff implementation. Trump's stance on tariffs could impact trade-exposed currencies and negotiations might lead to market adjustments.

The U.S. dollar saw a resurgence on Tuesday, bouncing back from its largest daily decline in over a year, following President Donald Trump's comments suggesting possible tariffs on Canada and Mexico by early February. This contradicts earlier expectations of a more cautious approach to trade policies.
The currency had previously dipped sharply on Monday after Trump's inauguration day ended without specific tariff announcements. This uncertainty initially provided relief to currencies sensitive to trade fluctuations. 'We are observing a very crowded long dollar trade; uncertainty around tariffs can cause significant currency shifts,' noted Erik Bregar of Silver Gold Bull.
The dollar rose 0.32% against a basket of currencies, after declining 1.24% the previous day. Other currencies, such as the euro and sterling, weakened as Trump's tariff rhetoric raised concerns over the trade balance, while attention turned to possible future negotiations and policy developments.
(With inputs from agencies.)
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