Dollar's Rollercoaster: Trade Court Ruling Rocks Forex Markets

The U.S. dollar witnessed a slump on Thursday, reversing its earlier gains due to investor apprehensions stemming from a U.S. trade court decision. The court blocked most of President Donald Trump's proposed trade tariffs, putting his controversial tariff agenda on hold.

The Court of International Trade demanded new orders from the Trump administration within ten days, prompting an appeal from the administration, citing concerns over the court's authority. Market analysts swiftly realized the ruling was narrow, primarily addressing the tariff plan's emergency authorization aspect.

This decision drastically impacted forex markets, emphasizing concerns over tariff-induced economic slowdown and inflationary pressures. The Federal Reserve's cautious stance on interest rates, combined with economic data indicating a contraction, further dented confidence, although Goldman Sachs predicts a rebound in risk markets, potentially benefiting the dollar.

(With inputs from agencies.)