WASHINGTON (dpa-AFX) - The U.S. dollar climbed higher on Friday as the Trump administration confirmed the imposition of 25% levies on Mexico and Canada and a 10% tariff on China from February 1.
The dollar, which was a bit subdued earlier in the day amid uncertainty about the proposed tariffs on imports from the three countries, moved higher after confirmation from the White House that the levies would be imposed from Saturday.
The U.S. President cited the flow of fentanyl and large trade deficits as among the reasons for the decision to impose tariffs on Canada and Mexico.
He also threatened 100% tariffs on BRICS nations over dollar replacement moves.
In economic news, data from the Commerce Department showed that consumer prices in the U.S. increased in line with economist estimates in the month of December.
The personal consumption expenditures (PCE) price index rose by 0.3% in December after inching up by 0.1% in November. The increase matched expectations.
The annual rate of growth by the PCE price index accelerated to 2.6% in December from 2.4% in November, which was also in line with estimates.
The annual rate of growth by the core PCE price index in December came in at 2.8%, unchanged from the two previous months and in line with estimates.
MNI Indicators released a report showing its reading on Chicago-area business activity increased in the month of January but continued to indicate contraction. The report said the Chicago business barometer rose to 39.5 in January from 36.9 in December, although a reading below 50 still indicates contraction. Economists had expected the index to climb to 40.0.
The dollar index, which dropped to 107.79 around noon, surged to 108.57 later in the day, gaining more than 0.7%.
Against the Euro, the dollar firmed to 1.0360 frm 1.0393. Against Pound Sterling, the dollar strengthened to 1.2394 from 1.2416.
The dollar firmed against the Japanese currency, fetching 155.20 yen a unit, compared to 154.29 yen a unit on Thursday. Against the Aussie, the dollar was flat at 0.6210.
The Swiss franc weakened to 0.9112 against the greenback, while the Loonie shed ground, losing about 0.3% at C$ 1.4535 a unit of the U.S. currency.
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