- The dollar fell amid concerns over Trump's new tariff plans and policy uncertainty
- Bloomberg dollar index dropped 0.3% extending its decline from Friday's trading
- S&P 500 futures fell 0.8% while Asian equities, led by Chinese firms, rose up to 3.1%
The dollar dropped with US stock futures as President Donald Trump's fresh tariff plans renewed concerns about American policymaking and the appeal of the nation's key assets.
A Bloomberg gauge of the greenback retreated as much as 0.3%, extending Friday's decline amid thin trading with Japan and China markets shut for a holiday. The Swiss franc, yen and euro led the gains against the dollar after Trump announced a global levy of 15% following a move by the US Supreme Court to strike down the president's reciprocal tariffs.
Futures on the S&P 500 Index fell 0.8% while a gauge of Asian equities rose as much as 1%. "The dollar is enduring a broad based decline as the market tries to assess implications from the court's decision," said Rodrigo Catril, strategist at National Australia Bank in Sydney. "Trump's tariff regime is still in place with more uncertainty."
Trump's latest tariff threat, the Supreme Court's decision, as well as senior US officials' attempt to defend the administration's assertive trade policies have sowed both uncertainties and confusion over policymaking in Washington. This may add to worries about the decline of American exceptionalism following Trump's initial sweeping global levies in April.
Bloomberg's dollar index fell 8.1% last year, its biggest annual drop in eight years, pressured by the Federal Reserve's policy easing and Trump's levies.
Senior US officials said Trump's tariff defeat at the Supreme Court won't unravel deals negotiated with US partners as they sought to defend the administration's assertive trade policies. Those deals - which the administration made with partners including China, the European Union, Japan and South Korea - remain in place, US Trade Representative Jamieson Greer said Sunday on CBS's Face the Nation.
Asia Bid
In Asia's emerging markets, the Thai baht, Philippine peso and Malaysian ringgit advanced on the back of a weak dollar. The region's equities also climbed. A gauge of major Chinese firms listed in Hong Kong rose as much as 3.1%, the most since May 12, while equity benchmarks of Taiwan and South Korea refreshed record highs.
"The immediate relief for Asian markets is that the US Supreme Court has placed some limits on the scope of tariff implementation," said Gary Dugan, chief executive officer at the Global CIO Office. The reduction of the tail risk on trade policy "may accelerate Asia's structural strengths of stronger domestic growth, more consistent policy frameworks and deeper regional trade integration."
What Bloomberg Strategists Say...
Global trade uncertainty is back as an issue for investors and that's bad news for US assets. The dollar's slide this morning has the potential to extend. Traders are closely watching how world leaders are responding to the latest tariff developments for cues on their next market bets.
Europe's trade chief said he'll propose halting ratification of a deal struck with the US, while India postponed talks to finalize an interim trade deal. China, India and Brazil are among those now seeing lower tariff rates for shipments to the US after Friday's court ruling.
"The broad dollar decline likely reflects the fresh injection of policy uncertainty the ruling entails," Goldman Sachs Group Inc. strategists including Kamakshya Trivedi wrote in a note. "Policy uncertainty is a particularly important channel for the dollar as it can negatively influence investor and business activity."
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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