Price action in the Mexican peso and Canadian dollar suggests markets are hopeful U.S. tariffs won't remain in place for long, MUFG Bank's Lee Hardman said in a note. The initial falls in the two currencies look relatively modest given the scale of tariffs,

The Canadian dollar and Mexican peso fell to one-month lows after U.S. President Donald Trump levied steep tariffs on the countries, although a fall in the U.S. dollar on the back of weak economic data limited the broader impact on Tuesday.

A significant impact on Canada's foreign investment inflows could potentially compromise economic growth, creating a bearish outlook for the loonie”