By Ronnie Harui


Th U.S. dollar surged against neighboring currencies after President Trump said he plans to place 25% tariffs on imports from Canada and Mexico on Feb. 1, stoking broad volatility in asset classes as investors adjust to the new administration's policy priorities.

The U.S. dollar climbed 0.9% against the Canadian dollar and 1.1% versus the Mexican peso after Trump's comments. The greenback also strengthened against most Asian currencies as Trump hinted that there could be tariffs coming on China and elsewhere. He also threatened an at least 100% tariff on BRICS nations, which includes China, Russia, India, Indonesia and Iran.

The dollar rose 0.3% against the offshore Chinese yuan, 0.3% against the Singapore dollar, and 0.4% versus the Philippine peso.

The reaction in Asian equity markets was mixed with Hong Kong's Hang Seng Index inching 0.2% higher, the FTSE Bursa Malaysia KLCI Index rising 0.6%, while South Korea's Kospi fell 0.3% and Singapore's FTSE Straits Times Index shed 0.6%.

Though his comments on Mexico and Canada tariffs suggest he may be aggressive with trade measures, he also said he isn't ready to move ahead with universal tariffs on goods from around the world.

"We're not ready for that yet," Trump told reporters when asked about the idea of universal tariffs. He had campaigned on the use of universal tariffs of at least 10% on imports from a variety of countries.

Trump's series of executive orders didn't include immediate changes to U.S. trade policy and held off on unveiling "day-one" tariffs, suggesting a shift to bilateral negotiations, CIMB analyst Michelle Chia and others said in a note.

Oil dropped after Trump pledged to boost U.S. crude production, ANZ Research analysts said in commentary. Trump reiterated his goal to encourage more output by cutting red tape and allowing drilling on previously banned federal lands, the analysts noted.

This underlines his determination to reorient federal government policy behind oil and gas production, a sharp pivot from outgoing President Biden's efforts to curb fossil fuels, they added.

Front-month WTI crude oil futures dropped 1.5% to $76.74 a barrel and front-month Brent crude oil futures slipped 0.2% to $80.02 a barrel.


Write to Ronnie Harui at ronnie.harui@wsj.com


(END) Dow Jones Newswires

01-20-25 2146ET