The Canadian dollar, Mexican peso, and euro held steady against the U.S. dollar on Tuesday following a volatile Monday, where they rebounded from multi-year lows. This came after U.S. President Donald Trump announced a one-month suspension of tariffs on Canada and Mexico.
The Chinese yuan remained firm in offshore trading after bouncing back from record lows amid hopes for a trade deal to prevent 10% tariffs on Chinese exports. The Australian dollar, often seen as a proxy for the yuan, also stabilized after a sharp rebound from a nearly five-year low.
Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum agreed late Monday to enhance border enforcement to meet Trump’s demands on immigration and drug control. This move paused 25% tariffs that were set to begin Tuesday, delaying potential economic fallout and price hikes.
Market sentiment improved following the announcement, but analysts at TD Securities warned that ongoing trade uncertainty could weigh on markets if no solid agreement is reached by month-end. They anticipate limited downside for the USD/CAD pair, forecasting a rise to C$1.50 due to Canada’s weak macroeconomic outlook.
The U.S. dollar traded at C$1.4435, down 0.85% from Monday’s high of C$1.4792, the highest since 2003. It rose 0.3% to 20.3939 pesos after Monday’s 1.7% drop from a near three-year peak. The offshore yuan traded at 7.3126 per dollar, while the euro dipped 0.2% to $1.0323.
Trump hinted at future tariffs on the EU but suggested Britain may be exempt. The dollar climbed 0.4% to 155.35 yen, reflecting reduced demand for Japan’s safe-haven currency. Bitcoin remained stable at $101,454 after recovering from a session low of $91,439.
