The U.S. dollar strengthened against major currencies including the yen and euro on Friday, while the Canadian dollar and the Mexican peso edged higher in choppy trading as markets braced for the implementation of President Donald Trump’s tariff threats.

Trump said on Thursday he would impose 25% tariffs on imports from Mexico and Canada from Saturday if the two countries do not crack down on the flow of illegal migrants and the drug fentanyl into U.S. territory.

The U.S. dollar strengthened against major currencies including the yen and euro on Friday, while the Canadian dollar and the Mexican peso edged higher in choppy trading as markets braced for the implementation of President Donald Trump’s tariff threats.

Trump said on Thursday he would impose 25% tariffs on imports from Mexico and Canada from Saturday if the two countries do not crack down on the flow of illegal migrants and the drug fentanyl into U.S. territory.

The Canadian dollar was up 0.12% but still trading near five-year lows versus the greenback at C$1.4477 and was set for a weekly decline of nearly 1%.

The Mexican peso was paring losses from the previous session and last stood at 20.652 per dollar, up 0.51%. The currency was still set for its worst weekly performance since October.

“It just seems like, based on what happened yesterday afternoon in the White House, that traders are looking not to take big risks going into the weekend because obviously tomorrow’s February 1st,” Velis added.

Bank of Japan Governor Kazuo Ueda said the central bank must maintain a loose monetary policy to ensure underlying inflation gradually accelerates toward its 2% target. Data on Friday showed core inflation in Tokyo hit 2.5%, the fastest annual pace in nearly a year.

The dollar strengthened 0.3% to 154.76 against the Japanese yen. Against the Swiss franc, the dollar was flat at 0.909.

The euro dipped to session lows after data on Friday showed German regional inflation slowed more than expected in December. It was last down 0.12% at $1.0378.

The European Central Bank cut interest rates on Thursday and policymakers left the door open for another cut in March, as concerns over lacklustre economic growth supersede worries about persistent inflation.

The Federal Reserve, meanwhile, kept rates steady this week and Chair Jerome Powell said there would be no rush to cut them again, though he also implied there was still scope for easing with rates being “meaningfully” above neutral.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.16% to 108.26.

“For currency markets, we think that even if the Canada and Mexico tariffs are implemented tomorrow, the market would likely embed some probability that the tariffs would not be permanent,” Goldman Sachs analysts led by Stuart Jenkins wrote in an investor note.