NEW YORK :The euro hit a five-month high on Tuesday after Ukraine agreed to a 30-day ceasefire proposal, while the dollar rose to a one-week high before weakening against the Canadian dollar following U.S. President Donald Trump’s additional tariffs on Canada.
Trump doubled his planned tariff on all steel and aluminum imports from Canada to 50 per cent after Ontario province imposed a 25 per cent tariff on electricity sent to the U.S.
Ukraine agreed to accept an immediate 30-day ceasefire in the conflict with Russia during talks with U.S. officials in Saudi Arabia. U.S. Secretary of State Marco Rubio said he would now take the offer to the Russians, and that the ball is in Moscow’s court.
The European single currency had been trading at a months-long high since last week on expectations of increased defense spending in Germany, the continent’s largest economy.
The U.S. dollar rose to C$1.4521 against the Canadian dollar, its highest since March 4. It later lost ground and traded down 0.28 per cent to C$1.4396.
The euro rose as high as $1.0947, a level last seen in October. It was last up 0.86 per cent and has gained more than 5 per cent this month. The euro jumped to its highest since January, of 161.78 yen, following Ukraine’s agreement to a ceasefire. It was last up 1.29 per cent at 161.57 yen.
Increased European defense spending and the prospect of a ceasefire in Ukraine are positive for the euro, said Juan Perez, director of trading at Monex USA. “Adding the ceasefire, even if it’s just for a month, and the idea that something concrete can actually happen between Russia and Ukraine is an excellent sign for the euro.”
The U.S. dollar remains weaker against its major peers as trade and growth concerns weigh on the greenback.
Wall Street’s main indexes, the benchmark S&P 500, Nasdaq and the Dow finished down on Tuesday.
Against the Swiss franc, the dollar strengthened 0.1 per cent to 0.882 but is down 2.42 per cent for the month. Against the Japanese yen, the dollar strengthened 0.31 per cent to 147.72. The greenback has lost 1.93 per cent against the yen so far in March.
The dollar index, which measures the greenback against a basket of currencies including the yen and euro, was on track for its seventh straight loss. It fell 0.57 per cent to 103.27.
“Everything that was vulnerable continues to look vulnerable: German yields keep going up and U.S. equities continue to look soft,” said Steve Englander, global head of G10 FX Research and North American Macro Strategy at Standard Chartered Bank’s NY Branch.
