The dollar rose against major peers on Tuesday after U.S. President-elect Donald Trump threatened Canada and Mexico with a 25% tariff on all imports into the United States. Stocks were weak after strong gains globally in the previous session following fund manager Scott Bessent being nominated as Treasury Secretary,

Stock markets fell and the dollar rallied Tuesday after Donald Trump warned he would impose huge new tariffs on China, Mexico and Canada on his first day in office, dealing a blow to hopes of a more moderate approach to trade policy.

U.S. President-elect Donald Trump's pledge to impose tariffs on Canada would drive up fuel prices for Americans as it would upend decades-old oil trade from its top crude supplier, analysts said on Wednesday.

President Claudia Sheinbaum Pardo said tariffs could cause more inflation and result in job losses for the U.S. and Mexico.

Markets expect the Fed would need to keep rates higher to counter inflation that could be caused if Trump follows through on his threat.

If they are imposed, the tariffs will hurt American consumers most of all. The North American supply chain is integrated; nearly $1trn-worth of goods crossed the northern and southern borders of the United States last year.

Mexican President Claudia Sheinbaum schooled Trump, warning that his plan for tariffs on imported goods would result in mutually assured economic destruction for both countries.

The U.S. dollar fell to a one-week low against its major peers on Wednesday as investors grew cautious about President-elect Donald Trump's tariff pledges while rebalancing their portfolios before the end of the month.