Australian Dollar Weakens Amid Trump’s Tariff Plans on US Imports.

Australian Dollar Slides as Trump’s Tariff Threats Weigh on Market Sentiment

The Australian Dollar (AUD) continued its downward trend against the US Dollar (USD) on Tuesday, marking its second consecutive day of decline. The AUD/USD pair’s weakness is primarily driven by escalating trade tensions, following tariff threats from US President Donald Trump.

The risk-sensitive Australian Dollar has come under additional pressure due to rising risk aversion in global markets. Reports suggest that President Trump’s advisers are gaining momentum to impose 25% tariffs on imports from Mexico and Canada, potentially starting as early as February 1.

On Monday evening, President Trump unveiled plans to impose significant tariffs on key imports, including computer chips, pharmaceuticals, steel, aluminum, and copper. These measures are part of a broader strategy to shift manufacturing to the United States and strengthen domestic industries.

The combination of heightened trade tensions and risk-averse sentiment has contributed to the AUD’s recent struggles, making it a critical time for investors to monitor developments in the global trade landscape.