Published by Global Banking & Finance Review®
Posted on February 23, 2026
3 min readLast updated: April 2, 2026
Add as preferred source on GoogleThe dollar weakened after the U.S. Supreme Court curtailed most Trump-era tariffs, boosting global-growth sentiment. Gains were capped by Middle East risks and uncertainty around temporary levies and potential litigation.
By Karen Brettell
NEW YORK, Feb 23 (Reuters) - The dollar weakened on Monday as traders evaluated U.S. tariff policies after the U.S. Supreme Court on Friday struck down President Donald Trump’s tariffs, while traders also watched rising tensions with Iran, which is in talks with the United States over a nuclear treaty.
The justices, in a 6-3 ruling authored by conservative Chief Justice John Roberts, upheld a lower court's decision that Trump's use of a 1977 emergency law exceeded his authority.
Trump has responded by saying he will find alternative ways to charge the levies.
“The biggest issue is that there's uncertainty now. And the way the market is discounting that uncertainty is also a little bit unknown,” said Sarah Ying, head of FX strategy at CIBC Capital Markets in Toronto.
The euro gained 0.23% to $1.1807 and the Japanese yen strengthened 0.43% against the greenback to 154.41 per dollar.
Sterling strengthened 0.27% to $1.3519.
Trump said on Saturday he would raise a temporary tariff from 10% to 15% on U.S. imports from all countries, the maximum level allowed under the law. The new levies are grounded in an untested law, known as Section 122, that allows tariffs up to 15% but requires congressional approval to extend them after 150 days.
Trump said he would use the 150-day period to work on issuing other "legally permissible" tariffs. In a social media post on Monday, he also pointed to the potential use of licenses to pressure countries.
“There is a big debate amongst the market on whether more tariffs are better or worse for the greenback. And you can argue both ways,” said Ying.
For example, more aggressive tariffs may increase inflation and reduce the odds of more Fed cuts, which would lead to a higher dollar. On the other hand, more uncertainty raises the risk of de-dollarization, which would be negative for the currency, Ying said.
The European Parliament decided on Monday to postpone a vote on the European Union's trade deal with the United States due to the new import tax.
U.S. Treasury Secretary Scott Bessent said on Friday he believed every country was going to honor the trade agreements made with the Trump administration over the last year.
There is also uncertainty over whether companies that paid tariffs will be able to obtain refunds.
Thousands of companies around the world have filed lawsuits against Trump's sweeping tariffs, and it may now take years of litigation to determine whether they will be refunded.
Traders are also focused on rising geopolitical tensions.
Iran and the U.S. will hold a third round of nuclear talks on Thursday in Geneva, Oman's Foreign Minister Badr Albusaidi said on Sunday, amid growing concerns about the risk of military conflict between the longtime adversaries.
The Mexican peso also weakened after one of Mexico's most notorious drug lords, Nemesio Oseguera, or "El Mencho," was killed in a military raid on Sunday, sparking widespread retaliatory violence.
The Mexican peso weakened 0.1% versus the dollar to 17.171.
(Reporting by Karen Brettell; Additional reporting by Niket Nishant in London and Tom Westbrook, Editing by Franklin Paul)
The article covers the U.S. dollar’s decline following the Supreme Court’s decision to strike down most of Trump’s tariffs and how currency markets reacted amid broader geopolitical risks.
It modestly weakened the dollar as traders priced in a more supportive global growth outlook, helping the euro, sterling, and other majors while safe-haven flows were mixed.
Heightened Middle East tensions, uncertainty around temporary 15% levies, potential litigation over past duties, and upcoming policy signals may keep volatility contained.
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