Dollar rises, base metals drop after Trump renews tariff call

Base metals fell after US President Donald Trump said he would likely enact tariffs on Mexico and Canada on February 1, souring market sentiment even as he held off from imposing levies on China.

On his first day back in the White House, Trump said that he may enact tariffs of as much as 25 per cent on Mexico and Canada at the beginning of next month.

Dollar surges

That pushed up a gauge of the dollar, which had fallen sharply on Monday, making metals more expensive for most buyers.

Traders are closely monitoring Trump's actions on his return to power. The relatively measured approach to China tariffs has offered some relief, especially as the Asian nation's appetite for most metals has declined as it struggles to emerge from an economic slowdown. 

Trump is ordering his administration to investigate whether Beijing had complied with a deal signed during his first term, according to a copy seen by Bloomberg News. 

Aluminum led the declines on the London Metal Exchange, and was down 0.8% to $2,669 a ton as of 9:21 a.m. in Singapore.

Copper dropped 0.3%, and nickel fell 0.4%.