Investors shrug off tariff illegality ruling as USD sees slight correction

“Higher Treasury yields have been supportive for the dollar so far this week because - unlike in the UK - the moves have been orderly. News over the weekend that most of the tariffs have been ruled as illegal have not dented the greenback, as investors see little chance that they will actually be revoked.

“We are also perhaps seeing a bit of a correction following what was a chastening month of August for the dollar, which sold-off against almost every other G10 currency amid fears over Fed independence and rising bets in favour of lower Federal Reserve rates. 

“The rest of the week will be all about Friday’s nonfarm payrolls figures, which seem particularly important following what was a disastrous report for August. 

“The main thing to look out for could be whether we see any further downward revisions to previous data, as we have in each of the last six months. JOLTS job opening figures will be closely watched in the meantime this afternoon.”