Mnuchin hails ‘weaker dollar,’ sending greenback plummeting

AFP/APP: US Treasury Secretary Steven Mnuchin said Wednesday in Davos that a “weaker dollar” was good for the United States, words that sharply lowered the value of US currency on the markets.

“Obviously a weaker dollar is good for us, it's good because it has to do with trade and opportunities,” said the top economic official from the US at the World Economic Forum in Davos, Switzerland.

He added, however, that “in the long term, the strength of the dollar is a reflection of the strength of the US economy and is and continues to be the primary currency, in terms of the reserve currency.”

Already weak since Tuesday and the signing by US President Trump of fresh protectionist measures against China and South Korea, the dollar lost even more ground after Mnuchin spoke.

His comments were widely interpreted as a green light from Washington to let the value of the dollar slide to make US exports cheaper.

The dollar fell against other major currencies and even hit its lowest level since December 2014 against the euro on Wednesday around 1300 GMT, to 1.2356 dollars before paring some of its losses later in the day.

Addressing reporters later on Wednesday, White House press secretary Sarah Sanders seemed to downplay any implication Washington might be attempting to jawbone the currency.

Asked if Trump would prefer a weaker or stronger dollar, she said, “We believe in free-flowing currency. The president has always believed in that.”

She said the dollar remained the global reserve currency due to its stability and the strength of the US economy.

“Currently we have a stable dollar because of how well the US is doing and it's as powerful as it has ever been,” she said.

Posted on: 2018-01-25T10:33:00+05:00