The U.S. dollar weakened on Monday following a Supreme Court decision that struck down President Donald Trump’s trade tariffs, while escalating concerns over a potential conflict with Iran further unsettled global markets.
According to Reuters, the euro climbed 0.2% against the dollar to $1.1808, while the British pound rose 0.3% to reach $1.3519. The American currency also retreated 0.2% against the Japanese yen, falling to 154.745 yen.
"These initial moves appear to be a knee-jerk reaction to headlines rather than true signals of fundamental changes in the global economic landscape," noted Brian Levitt, Global Market Strategist at Invesco. He added that the market's response might be short-lived as various legal and executive avenues remain for maintaining the tariffs.
As Hvylya previously reported, the Supreme Court ruled on Friday that Trump had exceeded his authority in imposing the broad-based duties. In response, the U.S. President announced a general 15% import levy effective for 150 days. It remains unclear whether the U.S. government will be required to refund already collected duties to importers.
The European Commission on Sunday demanded that Washington uphold last year’s agreement with the EU, which guarantees zero tariffs on specific goods, including aircraft and parts. Meanwhile, U.S. trading partners in Asia are reassessing risks, noting that previous Trump-era tariffs failed to reduce the U.S. trade deficit.
Adding to the financial market strain is the growing risk of a military confrontation between the United States and Iran. While both parties are scheduled for a third round of nuclear dispute negotiations on Thursday, Trump has already ordered a significant increase in military presence across the Middle East.
Goldman Sachs analysts emphasized that "escalating tensions in the Middle East have revived questions about geopolitical hedging and the impact of exchange rates on commodity price shocks." They identified the Swiss franc as the premier hedge against such volatility; the franc rose 0.3% to 0.7736 per dollar.