Investing.com-- The Canadian dollar fell to a five-year low, while the Mexican Peso remained under pressure on Thursday, following U.S. President Donald Trump's renewed tariff threats against Canada and Mexico.
Trump reiterated his intention to impose 25% tariffs on imports from Canada, and Mexico, citing concerns over illegal immigration and drug trafficking, particularly fentanyl.
He has set a deadline of Feb. 1 to decide on the tariffs. Trump said he would soon determine whether to exempt Canadian and Mexican oil imports from the 25% tariffs set to take effect on Saturday.
The Canadian dollar fell to a five-year low against the U.S. dollar with the USD/CAD pair inching slightly higher on late Thursday.
The Mexican peso's USD/MXN pair ticked slightly lower, but remained under pressure after rising nearly 1% in the previous session.
Additionally, a 10% tariff is proposed on Chinese imports, aimed at addressing trade imbalances and pressuring China to take stricter measures against drug trafficking.
The escalating trade tensions have led to increased market volatility and a broader risk aversion mood. Retaliatory tariffs in response to Trump's levies could further dampen sentiment.
Chrystia Freeland, a leading candidate to succeed Canadian Prime Minister Justin Trudeau, had earlier this week announced plans for a "retaliation list" targeting U.S. exports, including products from Florida, Wisconsin, and Michigan, worth approximately C$200 billion.