© Reuters. A man arranges Mexican 5 Pesos Hidalgo silver coins at currency exchange shop in Ciudad Juarez
By Shinichi Saoshiro
TOKYO (Reuters) – The Mexican peso sank to three-month lows against the dollar early on Friday after Washington unexpectedly said it will slap tariffs on all goods coming from its southern neighbor.
The safe-haven yen advanced as the Trump administration’s move to escalate its trade war with other countries further shook already fragile risk sentiment in global financial markets.
The Mexican peso tumbled 1.85% to 19.4942 per dollar after U.S. President Donald Trump said on Thursday the United States will impose a 5% tariff on all goods coming from Mexico starting on June 10 until illegal immigration is stopped.
At one point the peso weakened to 19.5950 per dollar, its lowest since March 8.
The yen was up 0.25% at 109.335 per dollar and also made gains against the euro and Australian dollar.
“The news on Mexican tariffs came just as the United States is imposing tariffs on China, and the timing is stirring up the markets,” said Daisuke Karakama, chief market economist at Mizuho Bank.
“Headlines related to trade issues come in short, unpredictable bursts. Currency market reaction is therefore quite intense, but also tends to be short-lived.”
The against a basket of six major currencies was flat at 98.147 after inching down the previous day, when it snapped two straight sessions of gains amid a continuing decline in U.S. yields.
The index was still headed for a 0.5% gain this week, supported by weakness in peers such as the euro and sterling, and the U.S. currency’s own status as a safe-haven in times of market and economic troubles.
The euro was steady at $1.1133. The single currency was down 0.65% this week.
The pound was effectively flat at $1.2613. Sterling has lost nearly 0.8% this week, as the imminent departure of Theresa May as prime minister deepened fears about a chaotic exit for Britain from the European Union.
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.
Latest posts by investing.com (see all)
- Forex – Australian Dollar Steady After RBA Decision - June 4, 2019
- Yuan Watchers Say 7 Is No Longer a Sticking Point for China - June 4, 2019
- Fresh Losses Coming for Australian Dollar, Strategists Say - June 4, 2019