Dollar mixed on tariff uncertainty, headed for monthly gain on yen
The dollar was mixed on Friday but on track for a monthly gain against the Japanese yen as investors factored in the likelihood of trade tariffs remaining in some form, even as U.S. President Donald Trump faces a court battle over his authority to impose them.
A federal appeals court temporarily reinstated the most sweeping of Trump's tariffs on Thursday, a day after a U.S. trade court ruled that Trump had exceeded his authority in imposing the duties and ordered an immediate block on them.
Investors are concerned that tariffs will slow growth and reignite inflation, though deals to drop tariff increases on China and the European Union as they negotiate trading terms has reduced pessimism over the U.S. economic outlook.
The dollar briefly bounced on Friday after Trump said that China had violated an agreement on tariffs with the United States. It comes a day after Treasury Secretary Scott Bessent said that trade talks between the U.S. and China were “a bit stalled.”
Tariffs are also seen as a key source of revenue as Congress works on a bill to reduce some income taxes.
Meanwhile the dollar showed little reaction to data on Friday showed that U.S. consumer spending increased marginally in April as a rush to beat higher prices from import duties slowed, while inflation eased during the month.
The euro was last down 0.47% at $1.1317. It is on pace for a 0.05% monthly loss, the first red month since December.
German inflation eased further in May, bringing it closer to the European Central Bank's 2% target and bolstering the case for an interest rate cut next week.
The dollar weakened 0.14% to 143.99 Japanese yen. The greenback is on track for a monthly increase of 0.7% against the Japanese currency, the best performance since December, following four consecutive months of losses.
Source: Reuters
