(Bloomberg) -- The dollar rallied against most major currencies after President Donald Trump said he would announce tariffs on steel and aluminum imports, spurring a renewed rush to the reserve currency.
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The currencies of Norway, Canada and Australia led a drop against the greenback after Trump said he would announce 25% tariffs on the imports on Monday, with the duties applying to metal imports from all countries. The euro fell 0.3% and China’s offshore yuan slipped 0.2% on the news.
“The risk remains that they incrementally escalate over time,” Billy Leung, investment strategist at Global X ETFs, said of broad US tariffs. “That could fuel persistent inflation pressures, keep the Federal Reserve cautious on rate cuts, and reinforce policy divergence factors that support a stronger dollar.”
The dollar’s gains extended Friday’s 0.3% advance after Trump signaled that he would announce reciprocal levies on trading partners, without specifying the details. The world’s reserve currency has climbed around 7% from its September low, and has gained against every Group-of-10 peer in the past six months.
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