Dollar Weakens as SCOTUS Rebuffs President Trump’s Tariffs

Group 1: Economic Indicators - The University of Michigan's February 1-year inflation expectations were revised lower to 3.4%, a 13-month low, from 3.5% [2] - The February 5-10 year inflation expectations were also revised lower to 3.3% from 3.4% [2] - The US December new home sales fell by 1.7% to 645,000, better than the expected 730,000 [2] - The US February S&P manufacturing PMI fell by 1.2 to 51.2, weaker than the expected 52.4 [3] - The US Q4 GDP rose by 1.4% (q/q annualized), weaker than the expected 2.8% [3] Group 2: Federal Reserve and Interest Rates - Atlanta Fed President Raphael Bostic indicated that it is prudent to maintain mildly restrictive interest rates, anticipating upward pressure on inflation due to expected US growth in 2026 [1][4] - Swaps markets are pricing in a 5% chance of a 25 basis point rate cut at the next policy meeting on March 17-18 [7] - The FOMC is expected to cut interest rates by about 50 basis points in 2026, contrasting with the BOJ's expected rate hike [7] Group 3: Currency and Tariff Implications - The dollar fell to a low after the Supreme Court struck down President Trump's global tariffs, which will increase the US budget deficit [4] - President Trump announced plans to impose a 10% global tariff under Section 122 of the Trade Act of 1974, alongside existing tariffs [6] - The dollar index fell by 0.13% due to weaker-than-expected US economic news [5] Group 4: Precious Metals Market - Gold and silver prices rallied sharply, reaching one-week highs, driven by heightened geopolitical risks and the Supreme Court's ruling on tariffs [12] - Strong central bank demand for gold was noted, with China's PBOC reserves increasing by 40,000 ounces to 74.19 million troy ounces [14] - Fund demand for precious metals remains strong, with long holdings in gold ETFs climbing to a 3.5-year high [16]