The USD depreciated against most major currencies as US President Donald Trump's new tariff plans raised concerns about US policy-making methods as well as the attractiveness of US assets.
Bloomberg's greenback measure at one point fell by 0.3%, extending the downward trend from Friday's session in the context of sparse trading due to the Japanese market closing for holidays. The Japanese Yen, Swiss franc and Swedish krona led the upward trend against the USD, after Mr. Trump announced a 15% global tax rate after the US Supreme Court ruled against the President's " reciprocal" tariffs.
Asian currencies such as the Thai baht and Malaysian ringgit also appreciated. Meanwhile, the S&P 500 index futures fell 0.7% in Monday morning trading in Asia.
The USD is under widespread downward pressure as the market tries to assess the consequences of the court ruling," said Rodrigo Catril, strategist at the National Bank of Australia (NAB) in Sydney.
Mr. Trump's tariff regime still exists and the level of uncertainty is still increasing.
Mr. Trump's latest tax threats, the Supreme Court ruling, and efforts by senior US officials to protect the administration's tough trade policy have created more uncertainty and confusion in the policy-making process in Washington. This development may increase concerns about the decline of "American exceptionalism" - which has emerged after the large-scale global tax measures that Mr. Trump implemented in April.
Bloomberg's USD index fell 8.1% last year, the sharpest drop in eight years, under pressure from the US Federal Reserve's easing of monetary policy and Mr. Trump's tariff measures.
Senior US officials said that Mr. Trump's failure at the Supreme Court will not break the trade agreements that the US has negotiated with partners, in an effort to protect the government's tough trade policy. These agreements, signed with partners such as China, the European Union, Japan and South Korea, remain in force, US Trade Representative Jamieson Greer said on Sunday on CBS's Face the Nation program.
Tensions related to tariffs continued to spread on Sunday when the head of trade in Europe said he would propose stopping the ratification of an agreement reached with the US, while India decided to postpone negotiations to complete a temporary trade agreement.
The widespread weakening of the USD is likely to reflect a new wave of policy uncertainty that the court ruling brings" - Goldman Sachs Group strategists, including Mr. Kamakshya Trivedi, wrote in a report.
Policy uncertainty is a particularly important channel of impact on the USD, as it can negatively affect investment and business activities.
