DXY Recovers as US Court Rules Against Trump Tariffs

The US Dollar Index (DXY) regained upward momentum on Thursday, trading around 99.93, after a federal court blocked President Donald Trump’s 'Liberation Day' tariffs. The court declared that invoking the tariffs under the International Emergency Economic Powers Act (IEEPA) was invalid.

Court Ruling Restores Market Confidence

The ruling invalidated additional duties, including proposed tariffs on fentanyl imports from China, Mexico, and Canada. This move reassured markets about the US legal system's checks and balances, supporting a 1% rally in US futures and a knee-jerk strengthening of the USD.

OCBC Outlook: Expect More 2-Way Price Action

Analysts at OCBC Bank expect more 2-way trading in the USD:

“The court ruling helps restore credibility, but uncertainty remains as the Trump administration is appealing. Further volatility may emerge ahead of Friday’s Core PCE inflation data.”

BoK Adds to FX Volatility

Comments from Bank of Korea Governor Rhee about currency discussions between the US and Asian economies added to short-term FX fluctuations, pausing USD gains against some Asian currencies.

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DXY Recovers as Court Blocks Trump's Tariffs, Boosting USD Confidence