USD: Tariff uncertainty keeps Dollar on edge – Commerzbank
|Commerzbank’s Michael Pfister notes that the initial weakness of the US Dollar after the Supreme Court tariff ruling has reversed, leaving USD pairs near pre-ruling levels. He stresses that the reaction is not clear-cut, with fiscal concerns offset by swift new tariffs. Ongoing legal challenges, trade negotiations and potential tariff hikes suggest persistent uncertainty for the Dollar.
Tariff ruling leaves Dollar unsettled
"The weakness of the USD following the Supreme Court's ruling on tariffs was short-lived. Yesterday morning, the movement gradually reversed, and most USD exchange rates are now trading at roughly the same level as before the ruling."
"However, uncertainty is likely to remain high. On the one hand, there have been initial reports of US companies filing lawsuits to claim back tariff expenses. On the other hand, many countries are of course examining what the new general tariffs mean for their trade deals."
"Officials have indicated that there is no final timetable yet for increasing general tariffs from 10% to 15%. Nevertheless, many countries have agreed to tariffs of around 15%. If the general tariff rate rises to 15% plus the applicable pre-increase rate, countries are likely to doubt the value of the many announced US investments."
"In an attempt to pre-empt this, the US President has directly threatened to impose higher tariffs on countries that 'want to play games'. He was presumably referring to the EU, which has suspended ratification of the deal with the US for the time being. The implications of Friday's ruling are therefore likely to persist for the US dollar."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.