The euro is holding steady as the Canadian dollar and the Mexican peso decline

The Canadian dollar and the Mexican peso fell on Tuesday to their lowest levels in a month as trade war fears turned into real fears after US President Donald Trump carried out his threats to impose tariffs on Canada, Mexico and China.

Trump's new 25% tariffs on goods from Mexico and Canada have come into force, along with a doubling of tariffs on Chinese goods to 20%.

A few minutes later, China said it would impose additional tariffs of between 10% and 15% on some US imports from March 10.

Canada has already said that retaliatory tariffs on the United States will come into force on Tuesday.

Mexico is expected to follow suit, with the Mexican president expected to announce her response during a press conference later today.

While the moves have not been bold so far, expectations are that China wants to be at the negotiating table with Trump instead of sitting back and sucking up blows.

On the other hand, the European currency, the euro, stabilized after a sharp recovery during yesterday's session, in the hope of reaching a peace agreement to end the Ukraine war as European leaders put forward proposals for a truce.

The single currency also did not decline after a White House official confirmed that the United States had suspended military aid to Ukraine days after Trump clashed with Ukrainian President Volodymyr Zelensky in the Oval Office, which worried investors.

However, the markets are waiting for the policy meeting of the European Central Bank, which will be held next Thursday, where traders expect another cut by 25 basis points.

The European Central Bank has already cut interest rates five times since last June in a sign that inflation is slowing rapidly.