Publicado: Ср, Января 31, 2018
Financiera | Por Marilu Caballero

Mnuchin defends weaker dollar comments

Mnuchin defends weaker dollar comments

Treasury Secretary Steven Mnuchin attempted to shore up confidence in the USA dollar on Thursday, clarifying comments that sent the greenback tumbling the day before.

The president's endorsement of the traditional USA policy in favor of a strong dollar contradicted earlier remarks by Mnuchin, who had said he favored a weaker dollar for US trade - sending the currency lower.

Trump's comments managed to push the Dollar Index up Thursday afternoon, after sitting at or around a three-year low for a day. The dollar fell 1 percent to 89.21 against a basket of six currencies, the first dip below 90 since December 2014.

Meanwhile, reacting on the Mnuchin's remarks, White House spokeswoman Sarah Sanders said at a daily briefing in Washington, "We believe in a free-floating currency".

The dollar fell Friday, as investors continued to sell the battered US currency. After Japanese Prime Minister Shinzo Abe took power in 2012 and talked down the yen in a bid to help the country's export companies, many viewed the comments as impolitic and a risk to sparking competitive devaluation and volatility in markets.

David Doyle, analyst at Macquarie Capital Markets, said the loonie's rise is not a story about the strength in the currency as much as it is about weakness in the US dollar against nearly every global currency.

Trump added that he thought Mnuchin's comments had been taken out of context, helping the USA dollar tick upward to 89.3 against a basket of currencies. Many of them are helped by a weaker dollar, and the USA currency declined again Friday. And American travelers to foreign countries may be in for a bit of sticker shock.

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The pound rose to $1.43 on Thursday. I expect that the pair may fall to the psychologically important level of 1.3000 before a reversal starts.

The dollar lost 10% of its value in 2017, and its decline has continued in 2018 as investors moved their money into the strengthening euro and other currencies.

The US dollar remained weak against a basket of currencies on Friday, bruised by comments by senior US officials this week backing a weak US dollar, and capped its worst weekly fall since June a year ago.

You want to get access to dollars - adjusted for any inflation effects - to get access to these economic fundamentals.

"I think the market really took a lot of positives away from that", said JJ Kinahan, chief investment strategist for TD Ameritrade.

President said he's not anxious about the strength of the dollar and said no one should be talking about currency since it easily fluctuates, CNBC reported Friday.

Mnuchin has claimed that a weaker Dollar isn't much of a concern, while Trump has praised the development of a "strong Dollar". "But forcing it down arbitrarily isn't good policy". "We are not looking to get into trade wars".

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