Market News
Euro steadies even as Trump's auto tariffs keep trade war fears intact - REUTERS
Summary
- Euro rebounds after hitting three-week low
- Currency markets calm as investors await trade-war fallout
- Investor focus on next week's reciprocal duties
SINGAPORE, March 27 (Reuters) - The euro bounced off a three-week low touched earlier on Thursday after U.S. President Donald Trump slapped a 25% tariff on imported cars and light trucks starting next week, even as the prospect of an all-out trade war dimmed risk sentiment.
The currency market reaction to the duties was largely muted, with most of the action centred around share prices of automakers.
The euro 0.3% higher at $1.078625 after touching a three-week low of $1.0733 in early trading. The yen was a shade stronger at 150.17 per dollar.
The Mexican peso weakened 0.5% to 20.2054 per U.S. dollar in Asian hours. The Canadian dollar was flat at weaker at 1.4261 per U.S. dollar.
The U.S. imported $474 billion of automotive products in 2024, including passenger cars worth $220 billion. Mexico, Japan, South Korea, Canada and Germany, all close U.S. allies, were the biggest suppliers. "This potentially drags out trade uncertainty even longer and raises the question of how radical a change to the global trade order is Trump trying to bring about," said Kyle Rodda, senior financial market analyst at Capital.com
The dollar index , which measures the U.S. currency against six rivals, was at 104.29, down 0.33% on the day. The index touched a three-week high in the previous session.
Vasu Menon, managing director of investment strategy at OCBC, said the latest actions will probably make cars more expensive for U.S. consumers already worried about inflation and could amplify recession worries.
"Retaliation from countries that have been affected by the latest auto tariffs could worsen the situation for US consumers and automakers and fuel further concerns about inflation and the outlook for the US economy," he said.
