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Ammon News - The U.S. dollar rose on Tuesday after President-elect Donald Trump said he would impose tariffs on products coming into the United States from Mexico, Canada and China, as investors braced for polices that could set the stage for a trade war.

In an initial knee-jerk reaction to Trump's comments, the dollar jumped more than 2% against the Mexican peso and hit a four-and-a-half-year high against its Canadian counterpart .

The U.S. currency also rose to its highest level since July 30 against China's yuan , . Other currencies also fell against the dollar but pared loss by mid-afternoon in Asia.

Trump said that on his first day in office he would impose a 25% tariff on all products from Mexico and Canada.

On China, the president-elect said Beijing was not taking strong enough action to curb the export of ingredients used in illicit drugs.

Wall Street's main indexes ended higher on Monday after Scott Bessent's nomination as U.S. Treasury secretary helped push bond yields lower.

"Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America," Trump said.

China has previously denied the allegations. Neither the United States nor China would win a trade war, the Chinese Embassy in Washington said after Trump's posts.

The Australian dollar sank to a more than three-month low of $0.64335 in early Asian hours and was last down 0.21% at $0.6478. The Aussie is often sold as a liquid proxy for the yuan given China is Australia's biggest trading partner.

New Zealand dollar touched a one-year low of $0.5797 but erased most of that loss to trade flat at $0.58415.

The dollar index , which measures the U.S. currency against six rivals, was last at 107.04. The euro was 0.18% lower at $1.04785, while sterling last fetched $1.25525, down 0.14% on the day.

The euro zone's single currency had taken a hit on Friday as European manufacturing surveys showed broad weakness, while U.S. surveys surprised on the high side.

The yen was an outlier, trading 0.4% higher at 153.55 a dollar.

Turning to cryptocurrencies, bitcoin was trading at $94,375, well below the record high of $99,830 it touched last week.

Bitcoin met profit-taking ahead of the symbolic $100,000 barrier, having climbed more than 40% since the U.S. election on expectations Trump will loosen the regulatory environment for cryptocurrencies.

Reuters