Dollar climbs, stocks retreat after Trump vows tariffs
Mexican peso, Canadian dollar slide on threat of 25% tariffs
Asian stocks decline, led by Japan amid risks to exporters
Chinese stocks resilient as tariffs less than mooted 60%
Updates prices ahead of London market open
By Kevin Buckland and Ankur Banerjee
TOKYO, Nov 26 (Reuters) -The dollar rallied sharply on Tuesday after U.S. President-elect Donald Trump pledged tariffs on all imports from Canada and Mexico, and additional tariffs on China.
Asian stocks declined, giving back some of the robust gains of the previous session, when they were buoyed by the nomination of fund manager Scott Bessent as Treasury Secretary, considered by investors as a voice for Wall Street in Washington.
Bessent's appointment had also led to a sharp fall in U.S. yields as investors scooped up Treasury bonds, sending the dollar sliding in the previous session.
"It's almost as if Trump wants to remind markets who is in control, after nominating Scott Bessent as Treasury Sec - a man markets expected to cool Trump's potency," said Matt Simpson, senior market analyst at City Index.
"With the Canadian dollar rising against the Mexican peso, markets are assuming this will hit Mexico the hardest."
The dollar jumped 1.5% to 20.5810 Mexican pesos MXN= as of 0549 GMT on Tuesday, and climbed 0.9% to C$1.4115 CAD=D3.
It strengthened 0.25% to 7.2644 yuan in offshore trading CNH=D3, after earlier reaching the highest since late July at 7.2730 yuan.
Australia's risk-sensitive dollar AUD=D3 - which also tends to reflect the outlook for top trading partner China - declined 0.25% to $0.6488, after earlier dipping to $0.64335 for the first time since Aug. 5.
"It was just last month that Trump said that 'the most beautiful word in the dictionary is tariff', so there really should not have been a surprise in Trump's intention, just in the timing of the comments," said Sean Callow, a senior FX analyst at ITC Markets.
"The fall in trade-sensitive currencies makes sense, and should persist near term."
Japan's Nikkei .N225 dropped 1.4%, giving back Monday's gains, as investors contemplated the risks of tariffs on the nation's many heavyweight exports, particularly automakers. Toyota 7203.T slid more than 2% and Nissan 7201.T tumbled almost 4%.
Australia's stock benchmark .AXJO eased 0.69%, a day after rising to a record high. Taiwan's share index .TWII lost 0.9%.
However, Hong Kong's Hang Seng .HSI was flat, while mainland blue chips .CSI300 eased 0.2%, after fluctuating between small gains and losses.
Trump said in a post on Truth Social that on his first day in office he would impose a 25% tariff on all products from Mexico and Canada, and an additional 10% tariff on goods from China, citing concerns over illegal immigration and the trade of illicit drugs.
Trump has previously threatened to slap tariffs on Chinese imports in excess of 60%.
"It's definitely a shock to the market and weighing on Chinese assets, especially the export sectors," said Gary Ng, senior economist at Natixis.
"But compared to what he imposed on Canada and Mexico, the magnitude (of the Chinese tariff) is not that big, so investors might still want to see what are the follow ups and when/if the 60% promised will actually come through."
U.S. S&P 500 futures EScv1 pointed 0.1% lower following a 0.3% gain in the cash index .SPX overnight.
Pan-European STOXX 50 futures STXEc1 dropped 0.9%.
The euro EUR=EBS slipped 0.2% to $1.0475. Sterling GBP=D3 lost 0.17% to $1.2548.
At the same time, the dollar weakened 0.3% to 153.66 yen JPY=EBS, after initially strengthening following Trump's tariff remarks.
The dollar-yen pair tends to track long-term U.S. Treasury yields US10YT=RR, which ticked up about 2 basis points to 4.2809% in Tokyo, but following a 15 basis-point slide on Monday.
Bitcoin BTC= rose 1% to $94,661, finding its feet following a pullback from last week's record high at $99,830. The token has benefited from speculation of an easier regulatory environment for cryptocurrencies under Trump.
Gold XAU= succumbed to the dollar's strength, dipping to a one-week low of $2,604.99.
Three-month copper on the London Metal Exchange CMCU3 was down 0.4% at $9,010.50 per metric ton, while the most-traded January copper contract on the Shanghai Futures Exchange SCFcv1 eased 0.1% to 73,900 yuan a ton.
Oil prices rebounded slightly from the previous session's slump as investors weighed a potential ceasefire between Israel and Hezbollah.
Brent crude futures LCOc1 added 0.25% to $73.19 a barrel, while U.S. West Texas Intermediate crude futures CLc1 rose 0.23% to $69.10 a barrel. Both benchmarks settled down $2 per barrel on Monday.
World FX rates YTD http://tmsnrt.rs/2egbfVh
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Kevin Buckland and Ankur Banerjee; Additional reporting by Stella Qiu; Editing by Jacqueline Wong
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