Dollar firm but rally fades after US tariff court roadblock; fiscal worries bubble

Forex

Summary:

The dollar’s rally faded after a U.S. court blocked Trump’s broad tariff plans, reviving fiscal and trade concerns. Market sentiment remains cautious amid ongoing uncertainty and reduced Fed rate cut expectations.

A relief rally in the dollar faded on Thursday, with the greenback holding on to only minor gains against major peers after rallying on news that a court blocked U.S. President Donald Trump from imposing import tariffs on other countries.

The initial boost to the dollar from the court ruling started to fade during London trade as market attention returned to a still uncertain trade outlook and worries about the U.S. fiscal outlook.

The dollar was last up just 0.1% at 145 yen, down from two-week highs touched earlier, trimmed gains against the Swiss franc to stand 0.1% higher at 0.8278 and was virtually flat against the euro.

"Perhaps people are reconsidering the headlines in that President (Donald) Trump still has the route to pursue sectoral tariffs - if he can't pursue these broader, more unilateral tariffs because of the court ruling," said ING's Head of Markets Research Chris Turner.

"Equally there's the issue with regard to if tax tariff revenues are constrained, then it creates more focus on the fiscal issues the U.S. faces this summer."

The trade court ruling found Trump had overstepped his authority by imposing across-the-board duties on imports from U.S. trading partners.

"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.

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.

In a note, Scotiabank FX strategists said that the court decision and likely appeal extend the uncertainty surrounding tariffs and business decision-making, keeping a brake on global trade.

Sterling was one of the few major currencies trading up against the dollar, gaining 0.1% to around $1.3470.

The dollar index, which measures the U.S. currency against six major peers, was at 99.904 after earlier rising above 100 for the first time in a week.

It remains down some 8% so far this year.

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.

U.S. Treasuries also sold off on Thursday, with 10-year yields up 4 basis points at 4.52%. [US/]

Europe's benchmark STOXX 600 index was up 0.3%, and U.S. stock futures jumped on a risk-on rally.

Global investor sentiment was also lifted this week after Trump delayed at the weekend his 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.

Traders meanwhile cut their expectations for Federal Reserve interest rate cuts to 42 basis points of easing compared with 50 basis points earlier in the week, LSEG data showed.

Source: Reuters

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Glendon

Cryptocurrency

Bitcoin continues to hold around the $108,000 mark, consolidating within a narrow range after a sharp rally from April lows. Price action suggests strength, but momentum has cooled slightly, setting the stage for a critical few days ahead.

Technical Analysis

The Daily Chart

On the daily chart, BTC remains above both the 100-day and 200-day moving averages, which are located in the $90,000 – $96,000 range, and have also crossed bullishly in recent weeks. The RSI sits around 63, showing that the rally isn’t yet overheated but is nearing the upper range.

A healthy consolidation around the $108,000 level could serve as a base for another leg up, provided bullish momentum holds and volume supports a breakout.

The 4-Hour Chart

The 4-hour chart shows a rising channel structure, and despite a recent breakdown of the lower trendline, the price has convincingly defended the horizontal support level at $106,000. This area has now become an intraday support zone.

The RSI is around the neutral 50 level, suggesting balanced momentum after a brief correction. A clean break and close above $109,000 and a return inside the channel could trigger a push towards the $112,000–115,000 range, while any breakdown below $106,000 might open the door for a short-term pullback toward the $102,000–$100,000 region.

Sentiment Analysis

Exchange Reserve

On-chain data continues to support a bullish bias. Exchange reserves are at their lowest level in years, now sitting around 2.4 million BTC. This sustained and aggressive decline reinforces the idea that investors are moving BTC off exchanges, likely for long-term storage, reducing sell-side liquidity.

With supply tightening and price climbing, the conditions remain ripe for higher valuations, especially if macro conditions stay favorable and demand from institutional channels remains strong.

Source: CryptoSlate

Risk Warnings and Disclaimers

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Adam

Economic

U.S. President Donald Trump could still find a workaround after suffering a major blow to a core part of his economic agenda.

The U.S. Court of International Trade on Wednesday ruled that the president had overstepped his authority by invoking the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs on numerous countries.

The Manhattan-based court ordered a permanent halt to most of Trump’s tariffs and further barred their future modification. A panel of three judges gave the White House 10 days to complete the formal process of stopping the tariffs. The Trump administration swiftly appealed the ruling.

Goldman Sachs

economists said the White House has a few tools at its disposal that could ensure the court ruling is only a temporary problem.

“This ruling represents a setback for the administration’s tariff plans and increases uncertainty but might not change the final outcome for most major US trading partners,” Goldman Sachs economists said in a research note.

“For now, we expect the Trump administration will find other ways to impose tariffs,” they added.

Options on the table

The Wall Street bank said the ruling blocks the 10% baseline tariff imposed by Trump on most imports, as well as the additional duties on China, Canada and Mexico – but not sectoral levies, such as those imposed on steel, aluminum and autos.

The Trump administration nevertheless has other legal means of imposing tariffs, Goldman says, flagging Section 122 of U.S. trade law, Section 301 investigations and Section 338 of the Trade Act of 1930.

Section 122 of the Trade Act of 1974 does not require a formal investigation and could therefore be one of the swiftest ways to get around the court roadblock.

“The administration could quickly replace the 10% across-the-board tariff with a similar tariff of up to 15% under Sec. 122,” analysts at Goldman said. They noted, however, that such a move would only last for up to 150 days after which law requires Congressional action.

Trump could also swiftly launch Section 301 investigations on key U.S. trading partners, laying the bureaucratic groundwork for tariffs — although Goldman said that this process will likely take several weeks at a minimum.

Section 232 tariffs, which are already in place for steel, aluminum and auto imports, could also be broadened to other sectors. This trade law allows the president to take action against threats to national security.

Section 338, meanwhile, allows the president to impose levies of up to 50% on imports from countries that discriminate against the U.S. Goldman noted that this particular measure has not been used before.

Michelle Schulz, founder and managing partner at Schulz Trade Law PLLC, echoed the possibility that the Trump administration would seek workarounds, including looking at ways the White House has imposed tariffs in the past.

“We have had section 301 tariffs on Chinese goods even under the previous administration, which were pretty harsh. So I can imagine that the administration will look at these provisions again and see if they can use 232, or 301, or some other mechanism where, whereby they can enforce the tariffs,” she told CNBC’s “Squawk Box Europe” on Thursday.

Schulz also pointed to the fact that such tariffs require investigations.

“I think that’s the difference here. All of the tariffs that we’re talking about today with IEEPA were issued under Executive Order and pretty much just by the executive branch,” she said. “When you look at these other sections, you’re going to have the involvement of the Commerce Department and other agencies investigating whether there really has been damage” to justify tariff action.

Schulz added that such investigations could take months.

What about the Supreme Court?

James Ransdell, partner at the law firm Cassidy Levy Kent, said the court opinion marks the first of many other cases still pending — and the first substantive opinion out of federal court “to really address the meat of the plaintiffs challenge.”

Ransdell said the speed of the Trump administration’s appeal was “very unusual” and suggests the government could be working through the night to prepare its motion for an emergency stay of the order.

He added that it was “certainly a possibility” that the Supreme Court could end up having the last say.

“There is not a lot of precedent on this particular statute and on similar actions by the president, so there might be an interest that the Supreme Court has in taking this up,” Ransdell told CNBC’s “The China Connection” on Thursday.

Steven Blitz, chief U.S. economist at TS Lombard, said Trump had a “very good” level of understanding of how to play the courts to get what he wants in terms of playing for time.

“The first thing he will probably do is an emergency appeal to the Supreme Court … wanting to get a ruling from them that basically says you can keep these tariffs in place while the appeals process runs through,” Blitz said Thursday.

“This king-like executive order was always going to, at some point, going to run into the courts … The difference between being a monarchy and being a constitutional democracy is the legal system,” he added.

Stocks, U.S. dollar on the rise

Equity markets around the world broadly rose on Thursday as investors reacted to the legal ruling. Asia-Pacific markets ended the day mostly higher and U.S. futures jumped.

Market reaction in Europe was more muted, with the pan-European Stoxx 600 up a mere 0.3% by early afternoon London time. The euro was last seen trading at $1.1285, little changed for the session after paring earlier losses.

Jordan Rochester, head of FICC strategy at Mizuho EMEA, said in a note that the limited market reaction was “because Trump still has various options to raise tariffs.”

“Things are more complicated but the end goal for Trump remains the same. In politics when there is a will, there is a way,” he said.

The U.S. dollar rose slightly against major rivals, with the U.S. dollar index

up 0.07%. So far this year, the dollar index has tumbled close to 8% amid continued market turmoil.

Source: cnbc

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Adam

Stocks

Dow Jones futures rose early Thursday, along with S&P 500 futures and especially Nasdaq futures, on a federal court ruling against Trump tariffs as well as strong Nvidia (NVDA) earnings. But they're coming off highs.

Nvidia stock signaled a breakout with AI peers Broadcom (AVGO), Taiwan Semiconductor (TSM) also rising around buy points. But a variety of stocks flashed buy signals on the two pieces of big news.

Fellow Dow Jones giant Salesforce.com (CRM) also reported, along with Veeva Systems (VEEV), Nutanix (NTNX) and Pure Storage (PSTG).

Tesla (TSLA) rose overnight as CEO Elon Musk leaves DOGE and on a report that its Austin robotaxi launch will start June 12.

The stock market rally fell modestly Wednesday, but holding the bulk of Tuesday's gains.

Dow Jones Futures Today

Dow Jones futures rose 0.25% vs. fair value, but well off its Wednesday night highs even with Nvidia a big Dow component. S&P 500 futures climbed 0.8% and Nasdaq 100 futures jumped 1.3%, also significantly paring overnight gains.

The 10-year Treasury yield edged up to 4.5%. Crude oil futures rose slightly.

Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.

Court Rules Trump Tariffs Illegal

The U.S. Court of International Trade ruled late Wednesday that President Trump exceeded his authority under the International Emergency Economic Powers Act of 1977. The three-judge panel ruled that Congress did not delegate "unbounded" tariff authority.

The court also rejected Trump's authority to declare emergencies at will to justify sweeping tariffs.

The court issued a summary judgment, blocking Trump's "Liberation Day" April 2 tariffs as well as fentanyl-related tariffs on Canada, Mexico and China.

The Trump administration says it will appeal via federal court.

President Trump does have some various legal tools to reimpose many of the duties struck down Wednesday. Industry-specific tariffs on autos, steel and aluminum remain, based on Section 232 authority.

Nvidia Earnings

Nvidia earnings topped views amid booming data center sales. The AI chip giant guided slightly lower on Q2 revenue, reflecting a loss of $8 billion in sales of H20 chips that the U.S. government blocked from selling to China.

Nvidia stock jumped in overnight trade, signaling a move above a 137.40 handle buy point. NVDA stock fell 0.5% to 134.81 on Wednesday, giving up slim intraday gains as the chip-design software export curbs suggest a hardening U.S. stance on chip technology generally.

Broadcom stock and Taiwan Semiconductor stock rose modestly in extended action. AVGO stock had closed in buy range while TSM dipped just below its handle entry.

Stock Market Rally

The stock market rally fell modestly heading into Nvidia earnings following Tuesday's strong gains.

The Financial Times reported Wednesday afternoon that the Trump administration has ordered chip-design software makers to stop selling to China. Cadence Design Systems (CDNS) and Synopsys (SNPS) tumbled 10.7% and 9.6%, respectively. Both bounced modestly overnight as Synopsys topped EPS views.

The Dow Jones Industrial Average fell 0.6% in Wednesday's stock market trading after hitting resistance at the 200-day line. The S&P 500 index also lost 0.6%. The Nasdaq composite declined 0.5% after briefly hitting a three-month high. The small-cap Russell 2000 tumbled 1.1%.

The Invesco S&P 500 Equal Weight ETF (RSP) sank 0.85%, back below the 200-day.

U.S. crude oil prices rose 1.6% to $61.84 a barrel.

The 10-year Treasury yield rose five basis points to 4.48% after falling 16 basis points over the prior three sessions.

Growth ETFs

The Innovator IBD 50 ETF (FFTY) dipped 0.3%. The iShares Expanded Tech-Software Sector ETF (IGV) slipped 0.7%%. Salesforce is a top-five IGV holding, with Nutanix also in the ETF. The VanEck Vectors Semiconductor ETF (SMH) declined 1.1%. Nvidia, Broadcom and Taiwan Semiconductor are huge SMH holdings.

Cadence Design and Synopsys stock are in both IGV and SMH.

ARK Innovation ETF (ARKK) shed 1.8% and ARK Genomics ETF (ARKG) lost 2%. Tesla stock is the largest holding across Ark Invest's ETFs.

Other Earnings

Salesforce earnings slightly beat Q1 views, with the software giant guiding up on Q2 and full-year revenue. CRM stock edged lower in overnight trade. Salesforce stock closed down 0.4%, just above the 50-day line but below the 21-day, with the 200-day above that.

Pure Storage, Nutanix and Veeva Systems all beat views.

Pure Storage stock was flat early Thursday, just holding the 200-day line and close to a buy point. Nutanix stock rose slightly to just above a buy point. Veeva stock surged, signaling a breakout.

Tesla Robotaxi Launch

Tesla will launch its robotaxi service in Austin on June 12, Bloomberg News reported around Wednesday's market close, citing a source. CEO Elon Musk has said the kickoff would start sometime next month.

Tesla tested a Model Y with no one in the driver's seat for the first time this week, according to the report.

The robotaxi launch will be geofenced within a portion of Austin, with teleoperators involved.

Also Musk said on X that his "scheduled time" for government work is ending, thanking President Trump.

Tesla stock rose modestly in premarket trade.. Shares fell 1.65% to 356.90 on Wednesday, holding above a 354.99 early entry.

What To Do Now

The stock market rally took a breather after a powerful session. Not a lot of stocks flashed buy signals Wednesday, though several remained in buy range.

The market, especially the broader AI theme, may takes its cue Thursday from Nvidia earnings.

Work on your watchlists.

Tesla stock and Broadcom are on IBD Leaderboard. Cadence Design stock is on IBD Long-Term Leaders. Broadcom stock is on the IBD Big Cap 20.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Source : investors

Risk Warnings and Disclaimers

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Michelle

Economic

Forex

White House economic adviser Kevin Hassett said on Thursday three trade deals were nearly done and he expected more despite a trade court ruling that blocked most of President Donald Trump's tariffs.

"There are many, many deals coming. And there were three that basically look like they're done," Hassett said in an interview with Fox Business Network.

Hassett dismissed a U.S. trade court ruling on Wednesday that blocked most tariffs and found Trump had overstepped his authority as the work of "activist judges". He said he was confident the administration would win on appeal.

The administration's view is that numerous countries will open up their markets to American products in the next month or two, Hassett said.

"If there are little hiccups here or there because of decisions that activist judges make, then it shouldn't just concern you at all, and it's certainly not going to affect the negotiations," Hassett said.

There were three deals ready for Trump's review at the end of last week, Hassett said.

Source: Yahoo Finance

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Warren Takunda

Economic

The Pound to Euro exchange rate (GBP/EUR) advances to 1.01965, its highest level since April 03, following a court ruling in the U.S. that eases global trade tensions.

This is after financial markets responded positively to a ruling that halts President Donald Trump's tariffs, with major stock futures rising sharply, reflecting investor optimism about reduced trade tensions and potential economic stability.

Pound Sterling benefits from the improved investor sentiment that follows a ruling by the U.S. Court of International Trade that Trump exceeded his authority by imposing sweeping tariffs under the International Emergency Economic Powers Act (IEEPA).

The court determined that the trade deficits and other issues cited by the administration did not constitute the "unusual and extraordinary threats" required to invoke emergency powers under IEEPA.

As a result, the court issued a permanent injunction against the enforcement of these tariffs.

The Euro is one of the biggest beneficiaries of fears that rising trade tensions will slow the U.S. economy, as investors seek out non-USD alternatives. Therefore, when trade tensions ease and optimism recedes, the Euro is amongst the biggest losers.

Pound-to-Euro Boosted by Trump's Trade War Setback_1

Above: GBP/EUR at daily intervals.

The ruling specifically targeted the "Liberation Day" tariffs announced on April 2, 2025, which included a 10% baseline tariff on most imports and higher tariffs on goods from countries with significant trade surpluses, such as China and the European Union.

These measures were challenged by small businesses and Democratic state attorneys general, who argued that the tariffs were economically damaging and legally unfounded.

While the court's decision invalidates these broad tariffs, it does not affect other tariffs imposed under different statutes, such as those on steel, aluminium, and autos, which were implemented under separate legal authorities.

The White House has indicated plans to appeal the ruling, asserting that addressing national emergencies should not be subject to judicial overreach.

Amidst hopes for easing tariff tensions, GBP/EUR trends higher, and we continue to anticipate a test of the 1.20 level within the coming days.

"Bottom line: the ruling is seen as a significant check on executive power in trade policy and is fueling a broad rally in risk assets," says Elias Haddad, Senior Markets Strategist at Brown Brothers Harriman.

Source: Poundsterlinglive

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Glendon

Economic

Forex

The number of Americans who filed for unemployment insurance for the first time last week, known as initial jobless claims, has seen a significant increase. The actual number of initial jobless claims came in at 240K, marking a substantial rise from the previous week and surpassing the forecasted figure.

The forecasted figure for initial jobless claims was set at 229K, indicating that the actual figure exceeded the forecast by 11K. This unexpected rise in jobless claims is a bearish sign for the U.S. dollar, as it suggests that the labor market may be experiencing some turbulence.

When compared to the previous week’s figure, the actual number of initial jobless claims has also increased. The previous number was 226K, meaning that there has been an increase of 14K in the number of individuals filing for unemployment insurance for the first time.

Initial jobless claims represent the earliest U.S. economic data available, and their impact on the market varies from week to week. However, a higher than expected reading is generally considered negative or bearish for the USD. Conversely, a lower than expected reading is viewed as positive or bullish for the USD.

The importance of these figures is underscored by their three-star rating. This means they are considered significant and are closely watched by analysts and investors alike.

While the increase in initial jobless claims may be a cause for concern, it is important to remember that these figures can fluctuate from week to week. Therefore, while this increase is notable, it does not necessarily indicate a long-term trend. Nonetheless, the financial markets will be closely monitoring future reports to see if this increase is a one-off event or the start of a new trend.

In conclusion, the rise in initial jobless claims is a surprising development that has exceeded both forecasted and previous figures. It will be critical to monitor these figures in the coming weeks to gain a clearer understanding of the state of the U.S. labor market.