Dollar rises after Trump's tariffs face court roadblock
The dollar rose against its major peers on Thursday after a court blocked U.S. President Donald Trump from imposing import tariffs on other countries, providing some relief for the currency that has struggled this year due to trade uncertainty.
The greenback gained a third of a percent against the yen and the Swiss franc but was off session highs after the trade court ruling that found Trump overstepped his authority by imposing across-the-board duties on imports from U.S. trading partners.
The Trump administration filed an appeal within minutes.
"Reciprocal tariffs are off for now, but this should not alter the medium trend. Trump may find other methods to impose his economic and trade agenda, so in that respect it's uncertainty squared," said Kenneth Broux, head of corporate research FX and rates at Societe Generale.
"For some investors this is just an opportunity to diversify to non-dollar securities."
U.S. assets including the dollar have been hurt in recent months as investors reassess historic assumptions around the strength of U.S. markets given an erratic trade policy and concern about high debt.
The dollar briefly hit a two-week high at 146.29 yen and was last trading 0.34% higher on the day at 145.23 yen. It was also 0.34% higher against the Swiss franc at 0.8296.
The euro slipped 0.13% to around $1.1276 and sterling was slightly weaker at around $1.3467. 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.
"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 dollar index remains down 8% so far this year and analysts said that the new court ruling did little to offer clarity on the outlook for tariffs and they were sceptical of a sustained dollar rally in the face of a long court battle.
The greenback has weakened about 2% against the 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%.
U.S. Treasuries also sold off, with 10-year yields up 5 basis points at 4.53%.
Source: Reuters
