On Thursday, the U.S. Court of International Trade in Manhattan ruled that the "Liberation Day Tariffs" attempted by former President Trump were unconstitutional, as foreign trade powers are the exclusive control of Congress. This ruling quickly triggered a sharp reaction in global markets, with the dollar rebounding significantly and risk asset sentiment heating up notably.
The Trump administration subsequently stated it would appeal the decision. Although the final legal outcome remains unclear, short-term market sentiment has clearly shifted. Investors expect the ruling to restrict the Trump administration's ability to act unilaterally in the trade sector, thus alleviating concerns about global trade tensions.
Dollar Rebounces Strongly, Breaking Key Technical Levels
As a result, the dollar strengthened across the board against major currencies. The dollar rose 0.6% against the yen to 145.72; 0.65% against the Swiss franc to 0.8326. The euro fell 0.5% against the dollar to 1.1232; the pound fell 0.2% to 1.3432. The dollar index rose to 100.40, not only reaching a new one-week high but also breaking the 100 mark for the first time again, reflecting a concentrated surge in dollar buying.
Ray Attrill, head of foreign exchange strategy at National Australia Bank, said: "We are still assessing the far-reaching implications of this ruling, but the market has clearly had a knee-jerk reaction, with the recent weakness in the dollar quickly reversed."
According to market technical analysis, the dollar index successfully broke out of a week-long horizontal consolidation zone on the daily chart and closed above the key integer level of 100. The MACD is close to forming a golden cross, and the RSI has risen above 50, indicating that the short-term trend has turned bullish. If subsequent rises break the 101 level, it is likely to challenge the 102.3 area; support below should focus on 99.6, and a break below will warn that the rebound is over.
Other Currencies Show Moderate Fluctuations, Commodity Currencies Mixed
Compared to the sharp fluctuations in major currencies, commodity currencies showed moderate performance. The Australian dollar was almost flat against the U.S. dollar at 0.6428; the New Zealand dollar fell slightly by 0.13% to 0.59595.
Analysts believe that while the dollar's strong rebound has a policy event-driven background, its medium to long-term performance will still depend on subsequent policy developments and the stance of the Federal Reserve. Previously, Trump's trade policies were widely seen as one of the key factors in the dollar's decline, causing shaken investor confidence and capital outflows, which led to a nearly 8% drop in the dollar over the year.
Although the court's ruling is not final, the policy restriction signal it sends provides short-term support for the dollar. Future trends will need to be closely watched, particularly whether the Trump administration will adjust its strategy and whether Congress will intervene to regulate relevant trade authorities.
