Dollar Strengthens on Trade Tensions as Trump Unveils New Tariffs; Bitcoin Hits Record High
The U.S. dollar advanced on Friday as renewed global trade tensions spurred demand, following President Donald Trump’s announcement of sweeping new import tariffs. These included a 35% levy on Canadian goods and plans for broad tariffs of 15% to 20% on most other trading partners.
While major currencies held steady in early Asian trading, the dollar gained momentum after Trump’s comments injected fresh uncertainty into global trade dynamics.
The Canadian dollar dropped 0.27% to C$1.3693, after a sharp initial decline of over 0.5%, reacting to the unexpected 35% tariff set to take effect August 1.
“Canada has clearly become a key target, and markets are starting to worry about broader fallout,” said IG analyst Tony Sycamore. “Until now, the market largely shrugged off tariff news, but this was unexpected.”
Trump also signaled that the European Union could soon receive notice of new tariffs, casting doubt on the progress of ongoing trade negotiations.
The euro slipped 0.2% to $1.1682 and was on track for a weekly loss of about 0.9%. The Australian dollar, sensitive to risk sentiment, declined 0.11% to $0.6581 as investor confidence faltered.
In South America, Brazil’s President Luiz Inácio Lula da Silva called for diplomacy in response to Trump’s threat of 50% tariffs but warned of reciprocal action if they take effect on August 1. The Brazilian real held steady at 5.5321 per dollar, though it was set for a weekly loss of 2%, its worst since February.
Elsewhere, the British pound eased 0.16% to $1.3558, while the New Zealand dollar dropped 0.34% to $0.6015. The Japanese yen weakened 0.44% to 146.91 per dollar, on course for a 1.6% weekly decline following a new 25% tariff from Washington.
While market reactions to Trump’s latest tariff announcements were less volatile than the sell-off seen after April’s “Liberation Day” policy shock, investors remain cautious, particularly with the August 1 tariff implementation date looming. This underlying uncertainty has lent support to the dollar, which rose 0.2% against a basket of major currencies to 97.79, putting it on pace for a 0.8% weekly gain.
“Right now, the uncertainty is creating a degree of dollar stability,” said Ray Attrill, head of FX strategy at National Australia Bank. “That could persist for a few more weeks.”
Crypto Markets Rally Despite Tariff Tensions
Bitcoin surged to another record high, reaching $117,685.96, buoyed by strong institutional demand and optimism surrounding upcoming U.S. cryptocurrency legislation.
“This record reflects not only resilience in risk appetite despite the tariff backdrop, but also growing confidence in U.S. crypto policy developments,” said Chang Wei Liang, FX and credit strategist at DBS.
Ether also saw strong gains, rising more than 6% to $3,017.81, marking its highest level in five months.
