The US dollar was fairly resilient in the face of the softer than expected Q4 GDP reading and the Supreme Court’s tariff decision. However, it came under pressure earlier today in the Asia Pacific session, in which Tokyo was closed for a national holiday. It clawed its way back in Europe and is now narrowly mixed. If American leadership is sought today, it may be muted by the winter storm that is paralyzing the Northeast.
President Trump nearly immediately after the Supreme Court decision announced a new 10% across the board tariff under Section 122 of a 1974 trade act. While many observers do not expect this to stand up to a legal challenge, we are not so sure and suspect that exhausting the legal recourse may take longer than the 150 days in which the now 15% tariffs can be levied. Nevertheless, President Trump’s negotiating leverage appears to have been diminished.
Prices
G10
• The euro recovered on the back of the US Supreme Court decision ahead of the weekend but stalled slightly shy of the previous day’s high. It was marked up in early trading today to reach $1.1835 but has gradually unwound the gain and recorded session lows near $1.1780 in the European morning. Nearby support is around $1.1760.
• The dollar reached the session high against the yen in late Asian/early European turnover near JPY155.65, an eight-day high ahead of the weekend. Within an hour of the Supreme Court’s decision, the dollar was sold to the session low near JPY154.70. It spent most of the North American afternoon in a 20-tick range on both sides of JPY155.00. It was sold to JPY154.00 in early turnover today but recovered to slightly above JPY155.00 in early European activity. The JPY155.20 offers initial resistance now.
• The jump in UK retail sales and better February composite PMI helped solidify sterling support around $1.3435 before the weekend. By the time the tariff decision was announced, sterling recorded new session highs near $1.35. The verdict saw sterling drop to almost $1.3460 where it was snaped up and taken to within 1/100 of a cent of the previous day’s high. It reached $1.3535 today before stalling. Since the high was reached, sterling has slipped back to $1.3500. Support is seen near the session low, $1.3480.
• The US dollar ran into formidable resistance around CAD1.3700. It tried in each of the past four sessions, traded above it in the last two, and failed to close above it even once. Still, the greenback held above the previous day’s low, found slightly below CAD1.3670. The greenback slipped to about CAD1.3650 before finding a bid that lifted it back to CAD1.3690. CAD1.37 still must be overcome to lift the technical tone.
• The Australian dollar posted a bullish outside up day by trading on both sides of the previous day’s range and settling above it high. Still, despite several tries since late last month, the Aussie managed to settle above $0.7100 once and that was on February 12. The multi-year high recorded that day was almost $0.7150. Follow-through buying today lift the Aussie a bit through $0.7100 before stalling. It fell to almost $0.7065 before another attempt higher weas made, which fizzled near $0.7090. The downside risk may extend toward $0.7040.
EM
• The Mexican peso posted its biggest advance in two weeks against the US dollar ahead of the weekend. The greenback was sold from nearly MXN17.29 to almost MXN17.11. The dollar held barely above MXN17.10 before recovering to about MXN17.2050. It is now around MXN17.17.
• The dollar first recorded a new high for the week before the weekend against the offshore yuan near CNH7.9065 before falling to CNH6.8965 after the Supreme Court’s decision. The greenback extended its losses to CNH6.8830 today, just above last week’s low (~CNH6.8810). Mainland markets re-open tomorrow.
• The dollar rose about 0.35% against the Indian rupee, when data reported before the weekend confirmed the central bank sold $10 bln to buy the rupee. Intervention looks to have stepped up last month. It may have been a little more than $27 bln. India is seen as one of the larger beneficiaries of the US Supreme Court decision. The dollar initially gapped lower to around INR90.68 before recovering toward INR90.8940. Friday’s low was around INR90.92.
Other Markets
• Most of the large equity market in the Asia Pacific advanced today, with the notable Australia, which fell by around 0.6%. The advancers were paced by a 2.5% surge in Hong Kong and a 2.65% rally in the index of mainland companies that trade there. After rising almost 2.10% last week, the fifth weekly advance, Europe’s Stoxx 600 is off to a soft start. It is off around 0.25%. US index futures are trading around 0.25-0.40% lower.
• Benchmark 10-year yields are narrowly mixed in Europe, while the 10-year US Treasury yield is off one basis point to almost 4.07%.
• Gold is extending its advance into the fourth consecutive session. It is up about 0.8% (~$40) to around $5150. It reached slightly through $5176 earlier, its highest level this month. Silver is up another 2.25% (~$86.60) after the 7.8% surge ahead of the weekend. It reached almost $87.85 earlier today.
• April WTI saw its pre-weekend premium unwind, pushing it down to around $65.40 before recovering back above $66.00. Initial resistance is seen around $66.40.
Data
• The US reports December factory orders and revised durable goods orders, but after last week’s estimate of Q4 GDP, and the preliminary durable goods orders, minimal market reaction is likely. Survey data is tap, as well, but the impact of Chicago Fed’s national activity index and the Dallas Fed’s February manufacturing survey, typically have little market impact even in the best of times. Federal Reserve Governor Waller gives the keynote address at the annual National Association of Business Economists. He and Governor Miran dissented in favor of rate cuts at the late January FOMC meeting. Although Miran has indicated that recent data has prompted him to curb his extreme dovishness, he still suggests scope for 100 bp in cuts this year would be appropriate, keeping open the possibility that he dissents again in the face of another standpat decision by next month’s FOMC meeting.
• Mexico reviews Q4 GDP for which the initial estimate was 1.6% year-over-year and 0.8% quarter-over quarter. That was the strongest quarterly growth since Q3 23 (1.08%), which itself was the best since Q1 22 (1.47%).
Reviewed by Marc Chandler
on
February 23, 2026
Rating:
