• The US Dollar rises after Donald Trump threatens BRICS with tariffs and increasing political concerns in France about the stability of the government. 
• A political fallout in the Eurozone could trigger more inflows from the Euro to the Greenback.
• The US Dollar Index spikes back above 106.00, though it faces a key level ahead at 106.52.

The US Dollar (USD) gains on Monday, paring back Friday’s losses, driven by Donald Trump’s promise to impose tariffs on BRICS countries if they stop using the USD and amid increasing French political turmoil, which is weighing on the Euro (EUR).

In a post on Saturday, the US President-elect said he would impose a 100% tariff on the BRICS if the group decides to move away from trading using the USD. “We require a commitment from these Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy,” he said.

Investors are also punishing the EUR – the main currency within the DXY US Dollar Index basket –   on the back of failed budget talks in France and increasing chances that a no-confidence vote against the current prime minister is approved. Finance Minister Antoine Armand said on Bloomberg television over the weekend that France will not be blackmailed on far-right demands from the National Rally (NR) of Marine Le Pen, which is asking for changes in the budget bill. The NR President Jordan Bardella said on Monday that its party will trigger a no-confidence vote mechanism “unless there is a last-minute miracle,” Reuters reports.