Dollar surges after US court blocks Trump's tariffs
SINGAPORE - The U.S. dollar rallied on Thursday in knee-jerk reaction to a court blocking President Donald Trump from imposing his import tariffs on other countries, providing some relief for the currency that has struggled this year due to trade uncertainty.
The Manhattan-based Court of International Trade said the U.S. Constitution gives Congress exclusive authority to regulate commerce with other countries that is not overridden by the president's emergency powers to safeguard the U.S. economy.
In response, the Trump administration filed an appeal within minutes.
"It's almost impossible to know if the tariffs will be completely unwound by this. But in the hypothetical situation that they are, it's natural to see dollar appreciation," said Yunosuke Ikeda, head of macro research at Nomura in Tokyo.
"Trump's tariffs will lead to stagflation pressure on the U.S. economy, so reversing those tariffs would be a positive for the dollar."
U.S. assets including the dollar, equities and longer-dated Treasury bonds have witnessed sharp declines in recent months as investors reassessed historic assumptions around the strength and outperformance of U.S. markets as Trump's erratic trade and tax policies sap confidence and spur inflation.
On Thursday, the dollar reversed some of those moves and rose 0.72% against the yen to 145.86 and 0.63% against the Swiss franc to 0.8326.
The euro slid 0.42% to $1.1245 and sterling fell 0.30% to $1.3432. That left the dollar index , which measures the U.S. currency against six major peers, back above 100 for the first time in a week.
The index, though, is down 8% this year and analysts remain sceptical of a sustained dollar rally and expect a long court battle over tariffs.
"There's an initial reaction of a stronger dollar and weaker yen. However, considering judicial processes like appeals, I don't expect a continuous rise in the dollar," said Hirofumi Suzuki, chief FX strategist at SMBC.
The greenback has weakened about 2% against the Japanese yen, nearly 6% against the Swiss franc and 4% against the euro since Trump slapped harsh levies on global economies on April 2, while the broader dollar index has fallen more than 3%.
"The markets are buying back the dollar on the news, rather than selling the yen," said Tohru Sasaki, chief strategist at Fukuoka Financial Group.
"But if the dollar continued to rise to above 148 yen, speculative short yen positions may be forced to unwind, causing the dollar-yen pair to rise even more," he said.
U.S. stock futures and Asian bourses jumped on a risk-on rally. Traders also cut their expectations for interest rate cuts by the Federal Reserve to 42 basis points of easing compared to 50 basis points earlier in the week, LSEG data showed.
Investor focus this month has been on the bond market, with lacklustre demand for longer-dated debt globally drawing attention to worsening government deficits.
Traders are also watching progress of a budget and spending bill in the U.S. Congress that is expected to add trillions of dollars of debt.
But sentiment about the U.S. economy has improved after Trump delayed on the weekend a plan to impose 50% tariffs on European Union imports and investors are on the lookout for any signs of improving relations between the United States and its trade partners.
(Reporting by Rae Wee, Stella Qiu, Johann M Cherian and Ankur Banerjee; Editing by Christopher Cushing and Jamie Freed)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Zawya
an hour ago
- Zawya
Octa's oil outlook: Middle East tensions threaten global supply
KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 21 June 2025 - Crude oil, which is arguably the world's most important commodity, is on everybody's mind right now. The flared up conflict in the Middle East is increasing risks of a major oil supply shock, potentially pushing the price of 'black gold' into the stratosphere and completely derailing the global economy. In this article, Octa, a global retail broker, shares its expert opinion on the unfolding situation and outlines possible scenarios for the global oil market. As it often happens, the market started to price in the possibility of a new conflict in the Middle East well in advance. On 11 June, oil prices rose more than 4% after reports surfaced that the U.S. was preparing to evacuate its Iraqi embassy due to heightened security concerns in the region. Two days later, Israel and Iran exchanged airstrikes, pushing both Brent and West Texas Intermediate (WTI), the world's two major oil benchmarks, to five-month highs as investors anticipated potential supply disruptions from an open conflict. To this day, the conflict continues without resolution and oil prices remain elevated even as there are some telltale signs that the parties may be willing to negotiate. 'This burgeoning unrest introduces an unprecedented degree of volatility, significantly amplifying the specter of a catastrophic oil supply shock', argues Kar Yong Ang, a financial market analyst at Octa broker, adding that the conflict between Israel and Iran 'carries ominous potential to propel crude prices to unprecedented levels, thereby unleashing a cascade of detrimental effects that could, in the most dire of scenarios, cause a major global economic crisis'. Indeed, the Middle East in general and Iran in particular play a pivotal role in global energy markets. A substantial portion of the world's crude oil and liquified natural gas (LNG) is produced and exported in this region. Iran itself, despite the existing sanctions on exports, remains an important supplier of oil—notably, for China. Furthermore, a vast number of ships carrying crude oil and LNG transit through the Strait of Hormuz, a narrow yet vital chokepoint that Iran has repeatedly threatened to close. Should Iran act on this threat and block the strait, the repercussions would be quite severe, likely pushing global crude oil prices well above $100 per barrel, or even higher, due to the significant disruption of supply. Technically, if we look at a broader, long-term picture, WTI crude oil seems to be moving sideways with a minor bearish tilt. On a daily chart (see below), the price still has not escaped from the bearish parallel channel. However, due to the latest geopolitical news, the price has managed to rise above the 200-day moving average (MA) and seems poised to break above the critically important 77.60-78.00 area. 'Breaching the $80 handle should not be difficult if the current situation deteriorates sharply', says Kar Yong Ang. 'Continuing destruction of oil infrastructure in Iran, potential U.S. involvement in the war, countries' unwillingness to negotiate and, above all else, Iran's attempts to block the Strait of Hormuz, all of this will have a bullish impact on prices'. Indeed, a break above 80 level, would open the way towards 83.40, 85.20, 87.30, and 90.00 area. Alternatively, in case the hostilities moderate somewhat, other countries—particularly the U.S.—refrain from directly participating in the conflict, and both Israel and Iran express willingness to negotiate, bearish sentiment will immediately kick in. 'I think WTI oil may lose as much as 5 dollars per barrel in the blink of an eye should we see some progress in nuclear negotiations between Europeans and Iranians, which are due to commence in Geneva this Friday', concludes Kar Yong Ang. In this scenario, a break below 71.50 level would allow bears to target 67.80, 64.80 and 61.70. Overall, WTI crude price is now stuck in a broad range between $70 and $80. The move above and below these two levels will essentially indicate if the situation in the region is getting worse or is getting better. The chart below shows potential bullish and bearish targets, marked in green and red, respectively. NYMEX light sweet crude oil (WTI) daily chart ___ Disclaimer: This press release does not contain or constitute investment advice or recommendations and does not consider your investment objectives, financial situation, or needs. Any actions taken based on this content are at your sole discretion and risk—Octa does not accept any liability for any resulting losses or consequences. Hashtag: #Octa The issuer is solely responsible for the content of this announcement. Octa Octa is an international CFD broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools. The company is involved in a comprehensive network of charitable and humanitarian initiatives, including improving educational infrastructure and funding short-notice relief projects to support local communities. In Southeast Asia, Octa received the 'Best Trading Platform Malaysia 2024' and the 'Most Reliable Broker Asia 2023' awards from Brands and Business Magazine and International Global Forex Awards, respectively. Octa
UAE Moments
4 hours ago
- UAE Moments
US President Trump Extends TikTok Sale Deadline by 90 Days
In a significant move, U.S. President Donald Trump has extended the deadline for ByteDance, TikTok's parent company, to sell the popular video-sharing app's U.S. operations by 90 days. The US President posted on Social Truth, "I've just signed the Executive Order extending the Deadline for the TikTok closing for 90 days (September 17, 2025)." The TikTok ban took effect on January 19, one day before President Trump's inauguration. Upon taking office, President Trump gave TikTok 75 days to divest its U.S. business, but a second extension pushed the deadline to Thursday, June 19, but now the deadline is September 17. "We are grateful for President Trump's leadership and support in ensuring that TikTok continues to be available for more than 170 million American users," TikTok said in a statement. This article was previously published on saudimoments. To see the original article, click here
UAE Moments
4 hours ago
- UAE Moments
♑ Capricorn: Daily Horoscope for June 19, 2025
Capricorn, today the universe invites you to embrace change and transformation. With the Moon in Aries sextile Pluto in Aquarius, your ambitious nature is supported by cosmic energies. Love Horoscope In the realm of love, dear Capricorn, today is a day to embrace the unexpected. The Moon in Aries encourages you to take bold steps in your relationships. If you've been holding back your feelings, now is the time to express them. Whether it's a simple gesture of affection or a heartfelt conversation, your openness will be appreciated. Remember, vulnerability can be a strength, not a weakness. For those single, a spontaneous encounter might spark something exciting. Keep your heart open and let the universe surprise you. Career Horoscope In the workplace, Capricorn, today is a day to harness the ambitious energy of the Moon in Aries. This aspect with Pluto in Aquarius supports bold career moves and innovative thinking. If you've been contemplating a new project or a change in direction, now is the time to act. Your natural discipline and foresight will guide you to make strategic decisions. Collaborate with colleagues who share your vision, and don't shy away from taking the lead. Your determination and hard work will not go unnoticed, paving the way for future success. Health Horoscope Today, Capricorn, your well-being is enhanced by the dynamic energy of the Moon in Aries. It's a perfect day to engage in physical activities that invigorate your body and mind. Consider a brisk walk in nature or a new workout routine to channel this vibrant energy. Remember, balance is key, so ensure you also take time to relax and recharge. Meditation or a quiet moment of reflection can help you maintain inner peace. Embrace the day with a spirit of adventure, and you'll find your vitality renewed. Finance Horoscope Financially, Capricorn, today's celestial alignment encourages you to be strategic and forward-thinking. The Moon in Aries sextile Pluto in Aquarius suggests that innovative ideas could lead to financial growth. It's a good time to review your investments or consider new opportunities that align with your long-term goals. However, remain cautious and avoid impulsive decisions. Trust in your ability to make wise choices and remember that patience often leads to the best outcomes. Your disciplined approach will serve you well.
