US FX WRAP: Dollar initially weighed on by SCOTUS tariff ruling as AUD and GBP outperform

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Analysis details (20:32)

The Dollar Index was flat on Friday, with performance against G10 peers mixed as AUD and GBP saw the greatest gains, while havens, CHF and JPY, lagged. It was a busy day stateside, with a deluge of data, geopolitical updates, and the SCOTUS ruling on Trump's tariffs. On the latter, they struck down the Trump admin's IEEPA tariffs, as expected, which the President was clearly unhappy about it. In a press conference after the decision, he remarked that effectively immediately, all national security tariffs under 232 and 301 remain in place, and 10% global tariff to be imposed on top of other tariffs. Note, Section 122 has a 15% tariff limit for 150 days. On the ruling, Wells Fargo wrote "We expect relief from the SCOTUS ruling to be temporarily risk positive mostly via lower uncertainty...The market will likely refocus on incoming data that continues to point to an economy and labour market that is recovering. This keeps the Fed firmly on the sidelines and limits further USD weakness in our view”. On today's data, Dec. PCE surpassed expectations across the board, Q4 rose 1.4%, well below the consensus 2.8%, S&P Global Flash for Feb underwhelmed, as did final UoM for Feb, but inflation expectations for both time horizons also came down.

As mentioned, AUD and GBP sat atop of the G10 breakdown, with both benefitting from the Dollar weakness in wake of the SCOTUS ruling. Prior to that, the Pound was marginally firmer in wake of a strong batch of UK data, as retail sales surged, as well as strong PMIs. Cable reached a high of 1.3515 against an earlier low of 1.3435.

EUR and NZD were ultimately flat, with broadly better than expected European Flash PMIs, whereby the solid German metrics provided fleeting Euro strength. For the Kiwi, overnight RBNZ Governor Breman said that although the central bank remains forward-focused, monetary policy will adapt based on new information instead of following a predetermined path.

For the Yen, overnight and through the first part of the session, it was weighed on by the broader Dollar strength and also Japanese CPI, which held a dovish skew. In summary, national CPI printed at 1.5% (exp. 1.6%), core was in-line whilst the supercore metric was a touch below the consensus. Elsewhere, PMIs printed better-than-expectations, benefiting from increased optimism following Takaichi’s landslide victory. 

20 Feb 2026 - 20:32- ForexData- Source: Newsquawk