This week, the U.S. Court of International Trade issued an enormous victory against President Trump. They ruled that he went too far with far-reaching global tariffs, delivering a sharp blow to his tariff-obsessed economic plan. The court’s decision has had a cascading effect across currency markets, sending shockwaves into the EUR/USD and GBP/USD pairs in particular.
The court’s ruling has already, in practice, killed Trump’s more extreme plan for global levies. This plan became a hallmark of his administration’s policy toward international trade. This unexpected decision has caused trade policy analysts and economists alike to reexamine the implications for future trade policies and economic projections.
As market participants processed the breaking news, the EUR/USD currency pair ticked down slightly lower, trading in the low-1.1300s. Analysts will be watching a key indicator—the U.S. Personal Consumption Expenditures (PCE) Price Index—very closely. They anticipate it to offer new direction and increased volatility for this currency pair. As such, market analysts pay very close attention to the PCE data. This important inflation measure can have a huge effect on monetary policy behavior.
GBP/USD spot rates now trade around the 1.3475-1.3470 level, about -0.15% lower on the day. Market analysts view the GBP/USD as a possibility for returning stability, especially considering the recent drop. As traders retain their wariness, they endure for the future U.S. PCE information launch.
As one major market analyst put it, the negative side of GBP/USD seems well padded. They observed that while there is some post-listing selling pressure, major drops probably won’t happen. The CAD/JPY cross found bid from the 1.3415 range, but new selling has developed after yesterday’s push higher.
The EUR/USD pair continues to trade with a modest bearish bias during the Asian session on Friday. Despite this rebound it is struggling to hold on to the impressive bounce back from the 1.1200 floor established earlier in the week. With it trading lower, traders are still looking to economic data that will give them direction for future trade.
“Just when traders thought they’d seen every twist in the tariff saga, the gavel dropped like a lightning bolt over the Pacific. In a blow to Trump’s tariff-centric economic blueprint, the U.S. Court of International Trade slammed the brakes on his sweeping global levies — ruling that the President had overreached.” – source
Traders continued to adopt a risk-off approach to the market sentiment while they waited for more information from the court ruling’s effects and economic data releases. The next U.S. PCE Price Index will move market dynamics considerably. Traders and investors alike will want to be glued to their screens in the coming days.
“EUR/USD edges lower to mid-1.1300s; looks to US PCE Price Index for fresh impetus.” – source