Tariffs and Currency Fluctuations: U.S. Dollar Strengthens Amid Tensions

The U.S. dollar gained strength against major currencies as markets awaited President Trump's tariffs on Mexico and Canada. Meanwhile, U.S. consumer spending data suggested the Federal Reserve may not cut interest rates soon. The Canadian dollar and Mexican peso saw volatile trading with the prospect of tariffs looming.

The U.S. dollar saw an uptick against major global currencies on Friday, as markets braced for the potential implementation of President Donald Trump's tariff threats against Mexico and Canada. The move comes as part of efforts to address issues related to illegal migrants and fentanyl entering the U.S.

Despite a rise in the Personal Consumption Expenditures Price Index, indicating strong consumer spending, experts believe the Federal Reserve is not in a rush to alter interest rates. John Velis, an FX and macro strategist, noted that the anticipated volatility from data releases was largely unfounded.

Currency actions were mixed; the Canadian dollar slightly improved but remained near a five-year low against the U.S. dollar, while the Mexican peso recovered some losses. In contrast, concerns over slow growth have the European Central Bank contemplating further interest rate cuts after their recent announcement.

(With inputs from agencies.)