After US President elect Trump announced that he would sign an executive order imposing a 25% tariff on all products imported from Mexico and Canada to the United States, the US dollar rose across the board against its major rivals on Tuesday (November 26), with the US dollar index rising 0.63% to 107.55, recovering all of Monday's losses.

On January 20th, as one of my many first executive orders, I will sign all necessary documents to impose a 25% tariff on all goods entering the United States from Mexico and Canada

The US dollar rose more than 2% against the Mexican peso to 20.75, reaching a new high since the November 6th US election, and is currently trading around 20.59; The USD/CAD once rose 1.37% to 1.4177, a new high since May 2020, and is currently trading around 1.4136.

In the past few days, the US dollar has been on the defensive, with a sharp drop of 0.56% on Monday, as the US bond market cheered on the news of Trump's selection of hedge fund manager Scott Bessent as the US Treasury Secretary.

Matt Simpson, a senior market analyst at City Index, said, "After nominating Beckett as Treasury Secretary, Trump almost seemed to want to remind the market who is in control of the situation - the market expects Beckett to cool down Trump's power. But as the Canadian dollar rises against the Mexican peso, the market believes that Mexico will be hit the hardest

Although traders consider Besant to be an old hand on Wall Street and a fiscal conservative, he also openly supports a strong dollar and tariffs.

EUR/USD was led by the US dollar in the Asian session on Tuesday and fell 0.6% to 1.0425 under pressure, giving up Monday's gains and currently trading around 1.0455.

The euro fell sharply last Friday due to a general weakness in European manufacturing surveys and unexpectedly high US data.

From a technical perspective, the euro fell in the Bullard range on the 21st, with conflicting daily momentum indicators. The moving averages on the 5th, 10th, and 21st also fell, indicating a bearish trend; Last Thursday's high of 1.0555 and last week's high of 1.0610 were the main resistance levels.

The lower bound of the Bollinger Bands on the 21st at 1.0350 and the low of last Friday at 1.0331 are preliminary support levels.

The November 26 date options of 1.0475 (1.606 billion) and 1.0500 (2.093 billion) may limit their trend during the Asian session.

Trump said that the governments of major Asian countries have not taken strong enough action to restrict the export of drug manufacturing materials to prevent illegal drugs from flowing into the United States from Mexico.

Trump posted on social media, "Before they stop, we will impose a 10% tariff on all products from Asian powers entering the United States on top of any additional tariffs

As a result, commodity currencies came under pressure, with AUD/USD falling by 1.08% at one point, hitting a three-and-a-half-month low of 0.6433. NZD/USD fell by 0.82% to 0.5796 at one point, reaching a new low since November 1, 2023.

The GBP/USD also weakened significantly on Tuesday, falling 0.49% to 1.2506 at one point, approaching a new low of over seven months set last Friday.

According to a survey by the British Retail Consortium (BRC), the price decline in UK stores narrowed in November.

Bank of England Deputy Governor Lombardy is concerned about inflation being higher than predicted and supports gradual interest rate cuts.

Today there is no frontline data or Bank of England event in the UK, with the US dollar and risk appetite leading the trend.

From a technical perspective, the GBP/USD daily momentum indicator is neutral, with the 21 day Bollinger Bands easing and the 5-day, 10 day, and 21 day moving averages falling - showing a negative trend pattern.

Last Friday's low of 1.2475 and the subsequent May low of 1.2446 are key support levels, and closing above last week's high of 1.2713 would be a positive signal.