Dollar falls after Supreme Court strikes down Trump’s tariffs

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• US Supreme Court struck down Trump's global tariffs
• Dollar fell 0.2% as fiscal concerns grew over tariff refunds
• US stocks rose, reducing demand for the dollar as a haven

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The dollar declined after the US Supreme Court struck down President Donald Trump’s global tariffs, highlighting the fiscal concerns that have soured sentiment toward the greenback over the past year.

The Bloomberg Dollar Spot Index fell 0.2% on Friday, trimming this week’s gain to 0.6%. Treasury yields climbed after the ruling as traders focused on the revenue from the levies, which has improved the federal government’s fiscal position. US stocks climbed, eroding the haven appeal for the greenback that has boosted it this week.

“The move probably reflects heightened fiscal concerns, as markets fret that the massive tariff refunds could create a significant US budget shortfall,” Matthew Ryan, head of market strategy at Ebury, said in an email.

Ahead of the decision, the dollar was up on the week as solid economic data led traders to pare expectations for Federal Reserve interest-rate cuts. Meanwhile, the looming threat of conflict between the US and Iran was fueling demand for the currency, a traditional haven during times of turmoil.

The dollar has been under pressure in recent months as other major central banks held rates steady or signaled hikes, while the Fed was seen delivering further cuts — a view bolstered by Trump’s nomination of Kevin Warsh to become the next Fed chair. The greenback is coming off its biggest annual drop in eight years, following an 8% slump in the Bloomberg dollar index in 2025.

The decision on Friday didn’t address the extent to which importers are entitled to refunds, leaving it to a lower court to sort out. If fully allowed, refunds could mount to more than half the total revenue Trump’s tariffs have brought in.

“We expect relief from the Supreme Court ruling to be temporarily risk-positive,” said Aroop Chatterjee, a strategist at Wells Fargo. “The administration retains significant tariff making authority via other statutes but some of these are untested and others will take time.”

Trump’s aggressive trade policies have upended global trade flows and sent shock waves through financial markets. Friday’s decision adds to those uncertainties.

Speculative traders added to short dollar bets last week, becoming the most negative on the greenback since June, Commodity Futures Trading Commission data show. The latest report from the CFTC is expected later Friday.