DXY: Trump tariffs challenged – OCBC

FXStreet Insights Team FXStreet

US Dollar's (USD’s) rebound found momentum from a US court ruling, saying that Trump’s unilateral imposition of 'Liberation Day tariffs' under the International Emergency Economic Powers Act (IEEPA) is invalid. DXY was last at 99.93 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

2-way trades still likely in the near term

"The ruling also blocks the enforcement of fentanyl-related tariffs on China, Mexico, and Canada that were announced earlier this year. In response, the Trump administration had filed a notice that it was appealing the ruling, and ultimately the US Supreme Court may have the final say. The court ruling helps to restore some credibility to the system which has been undermined by the unpredictability of Trump’s tariffs. "

"The check and balance system is at least intact for now, providing a knee-jerk rebound for the USD while US futures jumped over 1%. Adding to FX market volatility was BoK Governor Rhee’s comments that Asian nations had currency talks with the US. This headline saw some knee-jerk reaction, slowing USD’s advance against Asian FX. Nevertheless, Rhee’s comments alongside, uncertainty over the legitimacy of Trump’s tariffs may continue to see more 2-way price action in the USD ahead of core PCE data (Friday)."

"Daily momentum is not showing a clear bias while RSI rose. 2-way trades still likely in the near term. Resistance at 100.80/101 levels (50 DMA, 23.6% fibo retracement of 2025 peak to trough). Support at 99.2 and 97.90 (2025 low)."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD declines as market caution lifts US Dollar

GBP/USD extends its gains for the second successive day, trading around 1.3200 during the Asian hours on Wednesday. The currency pair depreciated as the US Dollar gained momentum, driven by a combination of robust domestic economic data and a complex, mixed geopolitical landscape.

EUR/USD weakens below 1.1400 as Fed hike bets lift US Dollar

The EUR/USD pair trades on a negative note near 1.1380 during the early Asian trading hours on Wednesday. The major pair extends the decline as traders continue to assess the developments surrounding the US-Iran peace deal.

Gold retains bearish bias near two-week low as Fed hike bets support USD

Gold recovers slightly from a fresh two-week low, near $4,080 touched during the Asian session on Wednesday, though it lacks follow-through. The US Dollar stands firm near its highest level since May 2025 amid firming expectations of a Fed rate hike, which, in turn, is seen undermining the non-yielding bullion. Furthermore, mixed US-Iran signals over Tehran's nuclear issues favor the USD bulls, suggesting that the path of least resistance for the commodity remains to the downside.

Australia CPI set to show inflation accelerated again in May

The Australian Bureau of Statistics will publish the high-impact Consumer Price Index for May on Wednesday at 01:30 GMT. Heading into the inflation test, the Australian Dollar is at its lowest level in two months against the US Dollar, having surrendered the 0.7000 psychological mark.

"Rearranging the deckchairs on the Titanic": UK's fiscal crisis outlasts another Prime Minister

Keir Starmer's resignation as the UK Prime Minister comes ten years after the Brexit referendum vote, a coincidence that financial markets have been quick to note. The British Pound trades around 1.3220 against the US Dollar on Thursday.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.