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


Khaleej Times
37 minutes ago
- Khaleej Times
Gold demand to hit new highs as central banks pivot away from dollar holdings
Central banks are diving headfirst into gold, driving demand to unprecedented heights as they pivot away from the US dollar in a bold de-dollarisation push. This strategic scramble for the yellow metal, fuelled by geopolitical tensions, economic uncertainty, and dwindling trust in traditional safe-haven assets, is set to propel gold demand to record levels in 2025, with prices soaring to new peaks. The current gold-buying spree is not happening in a vacuum. It coincides with a dramatic surge in gold prices, which have already risen 29 per cent year-to-date, hitting an all-time high of $3,500 per troy ounce in April. Despite the price rally, demand from central banks has remained resilient. Economists and precious metals analysts argue that the global gold rush — led by the very institutions that once anchored their wealth in dollars — reveals a profound transformation in the architecture of international finance. Metals Focus, a leading consultancy, reported that first-quarter buying in 2025 was in line with the 2022–2024 quarterly average, underscoring persistent demand even at elevated price points. The consultancy projects in its annual gold market outlook that central banks will snap up 1,000 metric tons of gold in 2025, marking the fourth consecutive year of robust official sector buying. While this forecast reflects an 8.0 per cent dip from the record 1,086 tonnes purchased in 2024, demand remains historically elevated, underscoring gold's enduring appeal as a politically neutral, non-liability-bearing reserve asset. Poland, Azerbaijan, and China lead the charge, with consistent inflows also noted into Iran, signaling sustained activity by the Central Bank of Iran. Metals Focus projects an average gold price of $3,210 per ounce in 2025 — a 35 per cent jump — fuelled by ongoing uncertainty and eroding confidence in the US dollar and Treasuries. The People's Bank of China has been a key player, boosting its gold reserves for the seventh straight month in May, adding 60,000 troy ounces to bring its total to 73.83 million fine troy ounces, according to recent data. This move reflects China's determined push to diversify holdings amid price fluctuations. Globally, sovereign players are acquiring roughly 80 metric tons of gold monthly, worth about $8.5 billion at current prices, analysts at Goldman Sachs Group Inc estimate. China's foreign-exchange reserves also edged up to $3.285 trillion in May from $3.282 trillion in April, signaling a broader strategy to bolster financial resilience. 'The drivers that have underpinned de-dollarisation in recent years remain firmly in place,' Metals Focus stated. President Trump's unpredictable policy stance, his public criticism of Federal Reserve Chair Jerome Powell, and the deteriorating US fiscal outlook have deepened doubts about the dollar and Treasuries as ultimate safe-haven assets. Elevated geopolitical tensions since the start of his administration have further dimmed the appeal of US assets, pushing central banks toward gold as a reliable hedge. This trend dovetails with broader concerns about the US dollar's waning global dominance. JPMorgan CEO Jamie Dimon and Tesla CEO Elon Musk have sounded alarms over fiscal instability and geopolitical risks, while Coinbase CEO Brian Armstrong has boldly suggested bitcoin could one day supplant the dollar as the global reserve currency. Meanwhile, alliances like Brics and the Shanghai Cooperation Organisation are accelerating de-dollarisation, increasingly conducting trade in national currencies to reduce reliance on the US dollar. Gold's allure extends beyond central banks. Investors, rattled by trade wars and uncertainty surrounding US assets, have flocked to the metal as a haven, propelling prices to near-historic highs. Though the rally cooled slightly with easing global trade tensions, bullion remains a cornerstone of stability in turbulent times. The World Gold Council notes that global gold demand, including jewelry, investment, and industrial uses, reached 4,899 tons in 2024, a record, and 2025 is poised to surpass this as central bank purchases sustain momentum. Exchange-traded funds backed by gold have also seen inflows, with holdings rising 5 per cent year-to-date to 3,200 tons, reflecting investor appetite. Looking ahead, the demand outlook remains robust. Metals Focus highlights that economic uncertainty, coupled with central banks' strategic shift, will keep gold in high demand. Emerging markets, wary of currency volatility and sanctions risks, are stockpiling gold to safeguard reserves. The International Monetary Fund reports that gold's share of global reserves climbed to 15 per cent in 2024, the highest in decades, and this trend is expected to persist. Analysts predict that if de-dollarisation accelerates, annual central bank demand could stabilise above 900 tons for the next five years, reinforcing gold's role as a cornerstone asset. They argue that central banks' relentless buying, paired with investor flight to safety, is rewriting the rules of global finance, positioning the yellow metal as the ultimate bulwark against uncertainty.


The National
an hour ago
- The National
Donald Trump defends sending US Marines to Los Angeles as immigration protests continue
US President Donald Trump has defended his decision to post National Guard and US Marines to Los Angeles, as protests against immigration raids continued. The Pentagon is sending about 700 active-duty US Marines and about 4,000 members of the National Guard in response to the protests. 'If I didn't 'send in the troops' to Los Angeles the last three nights, that once beautiful and great City would be burning to the ground right now, much like 25,000 houses burned to the ground in LA due to an incompetent Governor and Mayor,' Mr Trump said in a post on Truth Social, referring to a highly destructive wildfire that hit the city earlier this year. A defence official told Bloomberg on Monday that the Marines are based in Twentynine Palms, California. The estimated cost for the posting is about $134 million, a senior Pentagon official said on Tuesday. 'This isn't about public safety. It's about stroking a dangerous President's ego,' California's Governor Gavin Newsom said about the decision. 'This is reckless. Pointless. And disrespectful to our troops.' Mr Newsom added later that the purpose of the US Marines is defending democracy. 'They are not political pawns.' He said that the soldiers had been illegally posted to California 'so Trump can have a talking point at his parade this weekend'. Washington will host a large military parade on Saturday to mark the US Army's 250th anniversary. It is also Mr Trump's 79th birthday. The California Governor and Mr Trump have exchanged insults over the past few days, with Mr Newsom saying Mr Trump was acting like a 'dictator' and Mr Trump saying he would arrest Mr Newsom, if he were border chief Tom Homan. California Democratic Representative John Garamendi told CNN that Mr Trump's response to the protests is 'about Trump pretending that he is the king of this nation, that he has the ultimate power and authority to do anything he wants to do'. While the original protest was peaceful, law enforcement responded after demonstrators blocked vehicles in an attempt to stop agents from removing people who had been detained in the raids. Protests intensified on Sunday, as demonstrators blocked a major motorway, throwing rocks, electric scooters and other items on to police vehicles. Several self-driving Waymo cars were set on fire. There have been reports of looting and vandalism in the city. Businesses reported graffiti and broken windows, as well as looted shelves. Police have been firing rubber bullets and flash-bangs into the crowd as they clashed with demonstrators. Scores of protesters have been arrested, in addition to those detained on immigration offences, and at least five police officers injured, according to KTLA 5. Solidarity protests have taken place in cities across the US, in Santa Ana and San Francisco in California, as well as New York, Atlanta and Dallas. Los Angeles Mayor Karen Bass said the protests have begun to decrease in intensity. She blamed the federal government for aggravating the situation by sending in the National Guard and the Marines. 'I think we are an experiment, I think we are a test case for what happens if the federal government decides to take power from a governor and take over a city I think we are the laboratory rats right now for the administration,' she said. 'Stop the raids,' Ms Bass said in a post on X. 'We are a city of immigrants. Washington is attacking our people, our neighbourhoods and our economy. The Trump administration has made cutting down on illegal immigration a cornerstone of its domestic policy, with Immigration and Customs Enforcement agents carrying out an increased number of raids in cities across the country.

Crypto Insight
2 hours ago
- Crypto Insight
SEC eyes exemption framework to boost crypto innovation
The US securities regulator is working on an 'innovation exemption' to stoke the creation of more onchain products and services, according to Securities and Exchange Commission chair Paul Atkins. Atkins, a former crypto lobbyist, said during a Monday crypto roundtable led by the SEC's crypto task force titled DeFi and the American Spirit that he has directed staff to consider a conditional exemption relief framework. Exemptions could speed up innovation These temporary exemptions would relieve firms from specific regulatory requirements to foster innovation in emerging tech sectors, provided they meet certain conditions. Atkins said it would speed up the process of bringing onchain products and services to market while the SEC staff considers amendments to the Commission's rules and regulations. 'An innovation exemption could help fulfill President Trump's vision to make America the crypto capital of the planet by encouraging developers, entrepreneurs, and other firms that are willing to comply with certain conditions to innovate with onchain technologies in the United States,' he said. At the same time, Atkins said he has asked staff to consider whether amendments to the commission's rules and regulations would provide needed accommodation for issuers and intermediaries who seek to administer onchain financial systems. 'Most current securities rules and regulations are premised upon the regulation of issuers and intermediaries, such as broker-dealers, advisers, exchanges and clearing agencies,' he said. 'The drafters of these rules and regulations likely did not contemplate that self-executing software code might displace such issuers and intermediaries.' Crypto framework is still a work in progress The agency's Crypto Task Force was launched on Jan. 21 by acting SEC chair Mark Uyeda, who was tasked with establishing a workable crypto framework for the agency. Atkins revealed in June 3 remarks to the Senate Appropriations Subcommittee on Financial Services that the SEC will hone its crypto policies with 'notice and comment' and move away from shaping its rules through the courts. He previously appeared before lawmakers on May 20 and said the Crypto Task Force would release its first report in the next few months. New approach at SEC During Monday's crypto roundtable, Atkins also bashed the previous administration under former SEC Chair Gary Gensler and its approach to crypto. Gensler was heavily criticized by the crypto industry for supposedly creating policy through lawsuits and legal settlements rather than rulemaking. Since Gensler resigned on Jan. 20, the SEC has adopted a different approach to crypto, dismissing long-running enforcement actions against crypto firms. SEC staff have also released guidance around the most common crypto staking activities, saying they do not violate securities laws, as well as information about how federal securities laws could apply to crypto. Source: