Forex – U.S. Dollar, Mexican Peso Fall on Trump Tariff Threat

© Reuters. – The U.S. dollar fell, while the Mexican peso continued to slump, after U.S. President Donald Trump threatened to impose a 5% tariff on all Mexican goods if Mexico did not crack down on migration.

The , which measures the greenback’s strength against a basket of six major currencies, lost 0.4% to 97.667 by 10:41 AM ET (14:41 GMT), while jumped 2.7% to a nearly five-month high of 19.6689.

Trump said via Twitter that he will impose the tariff on June 10 and that it will last and increase until illegal immigration is stopped.

Meanwhile, the greenback was also held back by data showing a rise in inflation, supporting the case for the Federal Reserve to keep interest rates unchanged.

The (PCE) price index increased 0.3% last month, the biggest gain since January 2018. The core PCE rose 0.2%. Separate data showed that consumer spending is slowing after a temporary boost during the first quarter.

The dollar was lower against the safe-haven Japanese yen, with falling 0.9% to 108.61

Elsewhere, the euro surged on the weaker dollar, with up 0.4% to 1.1173, while cable rose 0.2% with at 1.2630

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.