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Mexican peso, Canadian dollar slide on threat of 25%

tariffs

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European auto, steelmaker stocks slide

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Bitcoin trading below $95,000, gold up

(Updates with midday trading in Europe; refreshes prices at

1240 GMT)

By Amanda Cooper

LONDON, Nov 26 (Reuters) - The dollar rallied on

Tuesday, while European shares fell, after U.S. President-elect

Donald Trump pledged tariffs on all imports from Canada and

Mexico, and extra tariffs on China.

European equities traded in negative territory, led by steep

declines across a range of sectors, including car companies and

steelmakers, some of the potential losers from any Trump-imposed

tariffs on the European Union.

The Mexican peso and Canadian dollar came

under pressure, while the euro shrugged off earlier

weakness.

S&P 500 futures rose 0.2%, paring their overnight

losses and pointing to another leg higher at the open in the

cash index following Monday's 0.3% gain.

"The dollar's had a knee-jerk move higher, the Canadian

dollar's softer, the peso is softer and the equity reaction -

particularly in Europe - makes sense," Pepperstone senior market

strategist Michael Brown said.

"Because the market's thinking, 'well, what's the one

country or the one bloc that's likely to be next'? It's probably

going to be the EU. So naturally you're going to be short

European equities this morning," he said.

The STOXX 600 was down 0.3% by midday in Europe,

with shares like Volkswagen and Stellantis ( STLA )

- the maker of Chrysler, Dodge and Fiat - down

2-4.7%. ArcelorMittal, the world's second-largest

steelmaker, was down 3%, while Finland's Outokumpu

lost 1.35%.

The weekend nomination by Trump of Scott Bessent as Treasury

Secretary triggered a wave of positive sentiment on Monday that

boosted stocks and bonds, as the fund manager is viewed as a

voice for Wall Street in Washington.

But Tuesday's tariff announcement undid much of that

optimism.

"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."

DOLLAR BOUNCES

The dollar jumped as much as 2.3% to 20.75 Mexican pesos

and was last up 0.9% on the day, and rose 0.7% against

the Canadian dollar to C$1.4096.

It was up 0.1% at 7.2548 yuan in offshore trading,

after earlier reaching the highest since late July at 7.2730

yuan.

"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.

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%.

"Our view remains that tariffs will eventually not end up as

bad as feared, but we will see increased uncertainty over the

coming months. Waking up to check the tweets for any policy

announcements could become the norm," Jefferies strategist Mohit

Kumar said.

The euro was last up 0.4% at $1.05395, having

earlier traded down by as much as 0.7%, while the pound

was up 0.3% at $1.2608.

At the same time, the dollar weakened 0.7% to 153.175 yen

, after initially strengthening following Trump's

tariff remarks.

The dollar-yen pair tends to track long-term U.S. Treasury

yields, which ticked up about 1.6 basis points to

4.279% in Europe, after Monday's 15 basis-point fall.

Bitcoin fell nearly 2% to $91,950, easing further

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 lifted off a one-week low to trade 0.26% higher

on the day at $2,632 an ounce, as the dollar rally lost some

momentum.

Oil prices recovered slightly from the previous session's

2.8% drop as investors mulled the implications of a potential

ceasefire between Israel and Hezbollah.

Brent crude futures were up nearly 1% at $73.71 a

barrel, while U.S. futures were also up 1% at $69.62 a

barrel.

(Additional reporting by Kevin Buckland in Tokyo and Ankur

Banerjee in Singapore; Additional reporting by Stella Qiu;

Editing by Bernadette Baum and Mark Potter)