Trump Team at Davos Backs Weaker Dollar, Sharpens Trade War Talk

A teller counts U.S. dollars at a money changer in Jakarta Indonesia

U.S. Treasury Secretary Steven Mnuchin used a press conference and panel discussion in the Swiss ski resort on Thursday to clarify comments he made a day earlier when he said a weak dollar is beneficial to the U.S. economy.

In an interview in Davos on January 24, 2018, Treasury Secretary Steve Mnuchin reiterated the Trump administration view that a "weaker dollar is good for trade".

In years past, US officials have often complained about other countries, especially China, for manipulating exchange rates to gain an economic advantage.

Through the first half of 2017, the US dollar (DXY) continued to trade around 100, the level it was when Trump entered office.

The comments supported a perception that the Trump administration is embracing the weaker dollar seen since the start of previous year.

On Wednesday, Mnuchin said he welcomed a weaker USA dollar, adding it would benefit the country in terms of trade. And although Mnuchin played down his remarks Thursday, the dollar fell further against major currencies.

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Given the sensitivity of currency markets to any statements from officials, perhaps the most significant point in Trump's comments came when he said, "I don't like talking about it because frankly nobody should be talking about it".

Investors were struck by Mnuchin's comments because for most of the past two decades, U.S. Treasury chiefs regularly stated that a "strong dollar is in the best interests of the United States". S. dollar hit three-year lows after comments by U. As shown in the real-time capture of the dollar trade at the moment of the remarks, the USA dollar dropped, continuing its trend lower. "So we're very happy with where the currency is at the moment", he said. On Friday, President Trump will be addressing the Davos summit where he is expected to reinforce his protectionist views, despite calls from global leaders to support globalization and worldwide cooperation.

Losses for the greenback have mounted since US President Donald Trump's inauguration a year ago, with the currency weakening against every Group-of-10 peer.

"I think you've seen already massive investment", he added. Mnuchin said it was "very important" for the U.S.to communicate with its counterparts.

Asked about the dangers of a trade war in the wake of the tariffs Trump just imposed, Ross said some trading partners are protectionist even when they talk about free trade. "This morning we seem to be recovering quite a bit more".

Prices of safe-haven yellow metal have risen smartly on Thursday, with a weaker dollar triggering some strong buying in gold across the Asian region.

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