US Court Blocks Trump Tariffs Lifts Dollar, Weakens Asian Currencies

A U.S. court ruling has declared the majority of former President Trump's reciprocal tariffs illegal, stating that only Congress holds the authority to regulate international trade, which has resulted in a stronger U.S. dollar and weaker Asian currencies, including the Indian rupee. The ruling has been welcomed by U.S. equity markets but has stirred uncertainty about the future of U.S. trade policy and its economic impact, as the Trump administration has appealed the decision. Market reactions have been mixed, with some analysts cautioning that the ruling may not significantly change the tariff situation due to the ongoing appeals process and potential for tariffs to remain in place during that time. The Federal Reserve's May meeting minutes suggest that dollar movements were influenced more by hedging activities than outright asset sales, adding complexity to the dollar's recent strength. The Indian rupee's decline against the dollar reflects these broader global shifts, with expectations of continued two-way volatility amid changing Federal Reserve rate cut outlooks and trade policy uncertainty. Overall, the court ruling underscores the tension between executive and congressional powers in trade matters, with significant implications for global financial markets and currency valuations.