Today’s takeaway … US tariff policy still in limbo.
If the dollar strengthened after yesterday’s court decision that the President’s tariffs were the result of a misapplication of trade law, that strengthening was short-lived in light of today’s appellate ruling that keeps the President’s tariffs in play for now.
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Yesterday, the United States Court of International Trade issued a ruling that found President Trump’s attempts to rectify what he has deemed a problem with balance of payments between the U.S. and its trading partners went beyond the bound set by Congress under the International Emergency Economic Powers Act. While the Trump administration argued that he had the authority to impose tariffs for the purpose of addressing balance of payments issues, the court found that the President’s tariffing powers, exercised under the IEEP when a determination that the US economy is subject to an unusual and extraordinary threat is made, should conform to the standard’s laid out by the Congress.
Today, the United States Court of Appeals for the Federal Circuit gave the Trump administration a temporary reprieve by staying the USCIT’s order that effectively blocked the application of the tariffs.
In short, global trade policy goes back in limbo as the Federal Circuit considers the USCIT’s decision. The Federal Circuit granted the stay of the lower court’s order to give time to the Administration to consolidate its appeals from the rulings.
My interest in this USCIT opinion was to determine what impact the cases would have on the forex betting markets. There was probably less of an impact from yesterday’s USCIT decision versus the Conference Board’s Consumer Confidence Index where the Board determined that confidence had increased between April and May with an increase of 12.3 points. The index now sits at 98.0.
On the downside, according to the Conference Board, appraisal of job availability weakened for the fifth consecutive month (just check out the deluge of YouTube videos about people being laid off); and on a six-month average, confidence was still down.
My take on the EUR/USD. Betting it exceeds 1.1275 …
The strengthening I saw around 4:15 pm EDT on 28 May seems to have evaporated. The EUR/USD went from 1.1316 around 11:00 am to 1.1289 at 4:15 pm. At 4:15 pm today, EUR/USD was priced at 1.1370. The “Sell America” sentiment is still in the air, I guess. And the Conference Board report I talked about doesn’t help.
Alton Drew
29 May 2025
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Alton Drew
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