At Any Rate Global FX: Talking through the tariff rulings, payrolls and fiscal threads
May 30, 2025
This discussion highlights the latest CIT ruling on tariffs and its ripple effects on micro markets and dollar valuation. The dialogue dives into alternative legal strategies surrounding tariffs and the fluid nature of trade regulations. Listeners will gain insights into the U.S. dollar's resilience amidst economic uncertainties, influenced by payroll data and unemployment rates. Additionally, the impact of increased fiscal spending on currency performance, particularly the Japanese yen, is critically assessed, reflecting ongoing geopolitical dynamics.
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Tariff Alternatives Post-IEPA Ruling
- The U.S. Court of International Trade blocked IEPA tariffs but suggested more legally defensible alternatives like Sections 122 and 301.
- These alternatives enable tariffs under balance of payments crises and investigation frameworks, ensuring tariffs remain a key theme.
Dollar Bearish Case Persists
- Despite the tariff ruling, the bearish case for the U.S. dollar remains due to global growth prospects and trade dynamics.
- Shifts in U.S. growth momentum relative to Europe and China are crucial factors that could change this outlook.
Payrolls Impact on Dollar Outlook
- U.S. payrolls data expected around 130k, representing a soft moderation but still resilient under trade uncertainty.
- Any stronger data could trigger a dollar short squeeze due to speculative positioning and positive equity correlations.