USD is weakening against most major currencies

USD Weakens Amid Holiday-Thinned Trading

The US dollar is trading lower at the start of the Asian session. Market activity remains subdued, with liquidity even lighter than usual as Japanese markets are closed today for a public holiday.

Meanwhile, Chinese markets have resumed operations following their extended Spring Festival and Lunar New Year break.

USD continues to decline.

Supreme Court Limits Presidential Tariff Authority

A recent Supreme Court decision has struck down substantial portions of former President Donald Trump’s tariff policies, marking a pivotal development in the debate over executive power in trade. The Court determined that the administration overstepped its legal boundaries by imposing sweeping tariffs under emergency provisions, finding that the rationale used did not align with the intent of Congress. As a result, much of the previous year’s tariff framework has been invalidated, leading to immediate uncertainty for businesses that had already adapted their operations and pricing to the tariffs.

While the ruling does not completely remove the president’s ability to levy tariffs, it does restrict the circumstances under which emergency or national security justifications can be invoked without direct congressional approval. Legal experts highlight that this decision reinforces constitutional checks on executive authority in trade, potentially shaping how future administrations approach similar issues.

In a swift response, Trump unveiled a new global tariff rate of 15%, signaling his commitment to his trade agenda despite the legal setback. Although the specifics of this updated tariff plan are still being clarified, the administration is expected to pursue alternative legal avenues that may be more narrowly defined or procedurally sound. The increased rate aims to keep up the pressure on international trading partners while attempting to comply with legal requirements.

Market Impact and Ongoing Trade Uncertainty

This series of events highlights the ongoing volatility in trade policy. Businesses now face renewed unpredictability regarding input costs, cross-border investments, and supply chain reliability. Consumers could also feel the effects through higher prices on imported goods, while policymakers must consider the potential inflationary impact. Although the Supreme Court’s ruling clarifies some legal boundaries, the rapid introduction of new tariffs suggests that trade disputes and their economic repercussions are far from settled.

Tariff Karen.