Investing.com-- Currencies of countries under the BRICS bloc weakened on Monday, while the dollar firmed after U.S. President-elect Donald Trump threatened to impose steep tariffs on the bloc over its attempts to pivot away from the greenback.
The Chinese yuan, South African rand and Indian rupee all weakened between 0.1% and 0.5% in Asian trade, while trading in other currencies was still closed for the weekend.
The dollar index shot up 0.5%.
Trump on Sunday said he will impose “100% tariffs” on imports from the BRICS bloc, effectively blocking them from U.S. trading if they proceeded with plans to introduce their own currency and shift away from the dollar.
Trump said he would seek commitments from the bloc towards the dollar and that it will not create any new currencies to rival the greenback.
The BRICS bloc consists of Brazil, Russia, India, China, South Africa, Egypt, Iran, Ethiopia and the United Arab Emirates. It has consistently called for a new global reserve currency, and had recently outlined plans for a common currency for trade between member states.
Trump’s recent tariff threat comes after he threatened to impose additional tariffs on China over the alleged flow of illicit drugs into the U.S.. The President-elect has also vowed to impose a blanket 10% tariff on all U.S. imports, and has flagged a largely protectionist stance towards trade and immigration.
Markets fear that Trump’s tariffs will draw retaliatory measures, sparking a renewed trade war between the world’s largest economies.