Financial markets initially respond positively to US court ruling on Trump tariffs, but drama lies ahead..
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| The US Court of International Trade has deemed that President Trump has exceeded his authority with his 'Liberation day' tariffs. 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.
The White House plans to appeal the ruling, however in the grand scheme of things, all it does is delay the inevitable, as the Trump administration has a range of legal tools to finally implement the tariffs at its disposal.
The problem is, Trump's strategy all along was to bring countries to the negotiating table and to do this he used the well known "escalate to de-escalate" strategy. Most countries are already in negotiations with the US now and so both the timing and the decision of the ruling looks to be pretty pointless.
Still, the news has meant the USD has gained across the board and is likely to secure the first weekly gain in many weeks, but we fully expect this to be short-lived and mid-market to be trading above £-$1.35 again soon.
The Euro has lost value across the board as investors deem the news worthy enough to move away from the 'safe-haven' of the year and into more 'risky' avenues. £-€1.20 mid-market is being chipped away at and if hit, would be the first time since March 5th. |
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