A Supreme Court ruling against Trump-era tariffs could slightly boost the USD while enhancing global risk sentiment, which may benefit high-beta currencies like the AUD and NZD. Despite indications of short-term undervaluation, EUR\/USD remains prone to a movement towards 1.1600. There is also unusual EUR\/DKK forward activity, suggesting speculative positioning and possible intervention by the Danish central bank.<\/p>\n
The ruling might have a modest positive effect on the dollar, while currencies such as AUD and NZD could gain from a more optimistic global trade outlook. The euro, having initially benefited from tariff-related disruptions, could face increased pressure if tariffs are lifted. EUR\/USD exhibits short-term undervaluation, but risks persist towards the 1.1600 support level.<\/p>\n
Unusual activity in EUR\/DKK forwards suggests speculative DKK selling, possibly due to Greenland-related headlines and liquidity issues that may prompt intervention by the Danish central bank. However, the currency pair remains just under 0.2% above the 7.460 peg, with ample reserves available for the central bank to buy DKK before considering a rate increase.<\/p>\n
With the Supreme Court expected to hear arguments next month on the Trump-era tariffs, we see the potential for a slightly stronger dollar. An outcome striking down the tariffs would be viewed as a positive for global trade, which already showed signs of improvement with the WTO Goods Trade Barometer ticking up to 101.2 in the last reading for 2025. This could make dollar-denominated assets more attractive in the near term.<\/p>\n
While our models show EUR\/USD is undervalued with fair value near 1.1900, the pair remains exposed to a drop toward the 1.1600 support level. The euro is trading around 1.1730 today, and any boost to global risk appetite from a tariff removal tends to benefit other currencies more. Therefore, traders should be cautious of this downside risk, even with the apparent undervaluation.<\/p>\n
We believe that high-beta currencies like the Australian and New Zealand dollars stand to gain the most from a more optimistic global trade view. Looking back at the end of last year, Australia\u2019s export data for December 2025 was surprisingly strong, and recent Chinese industrial production figures beat expectations. These currencies are well-positioned to outperform if trade barriers are formally lowered.<\/p>\n
The euro, which benefited significantly from the trade uncertainty when tariffs were first imposed back in 2018 and 2019, could face pressure if they are paused. This historical performance suggests the single currency acted as a relative safe haven during that specific turmoil. A reversal of that situation could logically unwind some of those previous gains against the dollar and other currencies.<\/p>\n
We are also watching the unusual activity in EUR\/DKK forwards, which points to speculation around recent geopolitical headlines. However, the Danish central bank has ample firepower to defend the 7.460 peg, with foreign exchange reserves last reported in December 2025 at over DKK 650 billion. This suggests they will intervene to buy kroner long before considering a rate hike.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Supreme Court tariff ruling lifts USD slightly; AUD, NZD benefit; EUR weakens; Danish central bank may intervene.<\/p>\n","protected":false},"author":62,"featured_media":16965,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-38723","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38723","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=38723"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38723\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16965"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=38723"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=38723"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=38723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}