Trump delays tax hike plan, Canadian dollar and Mexican peso rebound strongly, global markets welcome a breather?

According to Zhitong Finance APP, the adjustment of the tariff policy by the United States towards Canada and Mexico has triggered fluctuations in global markets. On February 3rd local time, U.S. President Trump announced a one-month delay in the implementation of the tariff plan on Canada and Mexico. Previously, Trump had planned to impose a 25% tariff on imported goods from Canada and Mexico starting February 1st. This decision led to a significant rebound in the exchange rates of the Canadian dollar and the Mexican peso. Canadian Prime Minister Justin Trudeau stated that Trump agreed to postpone the tariffs for 30 days after their phone call, during which both sides will work together to resolve trade issues. Following this news, the Canadian dollar surged 1% at the end of trading on Monday, reversing an earlier decline of 1.7%. Mexican President Claudia Sheinbaum also announced that the U.S. tariffs on Mexico would be delayed by one month, resulting in a 1.5% increase in the exchange rate of the Mexican peso against the U.S. dollar, which had previously depreciated by 3%. Market analysts believe that Trump's tariff policy may be more of a negotiation strategy rather than a real trade threat. Jordan Rochester, head of FICC strategy at Mizuho Bank, pointed out that Trump's policies are difficult to predict even 24 hours before a news release. Additionally, both Canada and Mexico have agreed to take measures to address Trump's concerns about the flow of fentanyl. Nevertheless, the market remains concerned about future uncertainties. Wells Fargo strategist Aroop Chatterjee believes that the easing of the Mexican peso situation may not last long, as the market's expectations for rising tariffs are still severely underestimated. Furthermore, Trump has not clarified whether he will delay the 10% tariff on Chinese goods, and the offshore RMB against the U.S. dollar erased earlier losses and slightly increased on the same day. Regarding the global economic situation, Raphael Bostic, president of the Atlanta Federal Reserve, stated that due to uncertainties about the direction of the U.S. economy in 2025, he hopes to "wait a while" before cutting rates again after last year's rate cut. Since Trump won the presidential election in November, the U.S. dollar has risen about 4.6%, while the Canadian dollar has fallen more than 4%. Tim Baker, a macro strategist at Deutsche Bank, believes this presents a "meaningful" breathing opportunity for the Canadian dollar. In other markets, Panama has committed to allowing U.S. warships free passage through the Panama Canal and has announced its withdrawal from China's flagship loan program, causing the country's bond prices to rise. The South African rand has also experienced significant fluctuations due to increased interest in higher-risk currencies. Additionally, Trump's decision to delay tariffs on Canada and Mexico has also impacted the oil market. U.S. WTI crude oil prices fell to $72 per barrel, erasing all gains from Monday. Although the U.S. will still impose a 10% tariff on China, Trump stated that negotiations on tariff issues with China will take place soon. Overall, while Trump's adjustment of tariff policies has temporarily eased market tensions, there remain many uncertainties in the future, and investors need to closely monitor subsequent developments