Investing.com-- The Mexican peso weakened sharply on Sunday, while the Canadian dollar softened amid heightened fears that U.S. President Donald Trump will deliver on his tariff threats, after he imposed steep import duties on Colombia.
The Mexican peso was more badly hit, with the USD/MXN pair- which gauges the amount of pesos required to buy one dollar- rising 1.1% to 20.4949 pesos.
The Canadian dollar also weakened, with the USD/CAD pair rising 0.1% to 1.4381 Canadian dollars.
The U.S. dollar firmed about 0.2% against a basket of currencies, although it was nursing steep losses from last week.
Both currencies were hit by heightened concerns that Trump will make good on his threats to impose up to 25% import tariffs on Mexico and Canada, after the President imposed a 25% tariff on all imports from Colombia.
Trump imposed the tariffs after Colombia refused to allow two U.S. military planes carrying deported migrants to land in the country, punishing the Latin American country for refusing to comply with his immigration policies.
Trump warned that the tariffs will increase to 50% by next week on further noncompliance, souring relations between the two countries.
The U.S. President had threatened similar tariffs against Canada and Mexico over issues of immigration and what he sees as unfair trade practices. Trump had also floated the possibility of a 10% duty on China, which could be imposed as soon as February 1.