- Supreme Court ruling against Trump tariffs throws market into confusion.
- Iran and US tensions remain elevated
- US dollar opens mixed to lower: JPY and CHF bolstered by safe-haven demand.
USDCAD open: 1.3676, overnight range 1.3649-1.3680 close 1.3681, WTI 66.09, Gold 5163.30
The Canadian dollar was ignored overnight but drifted lower in early New York trading uninspired. Canada has dodged the bullet from the latest US tariff news because most of US/Canada/ is covered under the USMCA trade deal.
American trading may be subdued today due to a blizzard that is impacting 41 million people including NYC.
WTI oil prices danced in a $65.46–$66.47 band as markets fear that the US will attack Iran this week if Nuclear talks, scheduled for Thursday, fail.
The US Supreme Court dealt a decisive blow to Trump’s use of the International Emergency Economic Powers Act as the legal basis for imposing tariffs. The levies were ruled unlawful. Trump wasted no time responding, announcing a 15% tariff on all imports under Section 122, which allows him to impose duties for 150 days before requiring Congressional approval.
The court’s decision, followed immediately by Trump’s counterpunch, injects fresh uncertainty into the web of bilateral trade agreements, frameworks, and memorandums of understanding negotiated by his administration. It also raises a larger question. Will the sizeable US investment commitments that countries were pressured into announcing still materialize? There is little obvious incentive for them to proceed.
Asian markets were shuttered in Japan and mainland China. Hong Kong’s Hang Seng climbed 2.53%, with investors viewing the tariff setback as potentially strengthening China’s negotiating leverage. Australia’s ASX 200 slipped 0.61%.
By 7:30 am, European equity indices were mixed. France’s CAC-40 and UK’s FTSE 100 are flat while the German DAX fell 0.52%. S&P 500 futures are down 0.45%, the US Dollar Index is 97.83, and the 10-year Treasury yield is 4.073%.
EURUSD is near the bottom of its 1.1774-1.1835 range amid renewed trade uncertainty. The EU is pressing for clarity, emphasizing that negotiated commitments should be respected. Germany’s Ifo survey showed improvements across Business Climate, Current Assessment, and Expectations, but those gains were overshadowed by tariff developments.
GBPUSD is trading defensively in a 1.3476-1.3535 band. Markets are struggling to decipher Washington’s shifting tariff approach and its impact on the UK’s previously negotiated 10% tariff rate.
USDJPY fell in Asia, then rose from 154.00-154.95 in subdued trade as Japanese markets observed the Emperor’s Birthday holiday. The yen saw a bit of demand from safe-haven flows after the US Supreme Court ruling.
AUDUSD churned in a 0.7066 and 0.7113 band. Australia’s Trade Minister warned that the across-the-board 15% tariff leaves Australia in a more disadvantageous position than before the court’s intervention.
