Dollar slips after SCOTUS tariff ruling, but set for strongest week since November

The U.S. dollar slipped on Friday, as traders assessed the fallout from the Supreme Court’s ruling striking down President Donald Trump’s sweeping tariffs. Still, the currency was set for its best weekly gain since November, boosted by a more hawkish Federal Reserve outlook and elevated tensions between the U.S. and Iran.

At 17:31 ET (22:31 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% lower to 97.72. 

It was on course for a weekly gain of about 1%, which would mark its strongest performance in nearly three months.

SCOTUS strikes down Trump’s tariffs

In a long-awaited opinion, the Supreme Court of the United States on Friday ruled 6 to 3 that Trump did not have authority to impose sweeping reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA).

Trump was critical of the top U.S. court after the ruling, calling it "deeply disappointing" and a "disgrace to our nation" and suggesting that the court had been "swayed by foreign interests." The president said the tariffs would still remain in place under other statutes, while imposing a new global 10% levy.

"The removal of tariffs reduces a source of friction in the real economy. Tariffs were expected to raise input costs, tighten profit margins, and weigh a bit on economic growth — slowing economic conditions are generally supportive for Treasuries," Jeff Buchbinder, chief equity strategist at LPL Financial, said.

"With that drag removed, growth may stabilize at the margin, and inflationary pressures embedded in the bond market could ease faster than markets previously expected. This changes the balance of risks around the Fed’s rate path and may lead to some modest repricing of rate cut expectations and incremental U.S. dollar weakness," he added. 

Key data disappoints 

The dollar has seen demand this week, buoyed by solid U.S. data, a hawkish tone to the minutes from the last Fed policy meeting as well as worries about potential military conflict in the Middle East.

On Friday, two key sets of data disappointed. 

The core PCE index - widely seen as the Fed’s preferred inflation gauge - came in hotter than expected on both a M/M and Y/Y basis in the last month of 2025. Core PCE rose 0.4% M/M and 3.0% Y/Y, with the latter reading the highest since November 2023 and well above the central bank’s 2% target.

At the same time, the preliminary estimate for U.S. Q4 GDP growth came in at 1.4%, significantly below the consensus figure of a rise of 2.8%.

Euro, sterling head for weekly losses  

In Europe, EUR/USD traded 0.1% higher to 1.1781. The single currency was set to lose 0.7% for the week, weighed down by uncertainty over European Central Bank President Christine Lagarde’s tenure.

Additionally, German producer prices fell more than expected in January, decreasing by 3% on the year, instead of the expected 2.1% decline, and there are also PMI numbers for the whole of the Eurozone for investors to digest later in the session.