“The timing of Mnuchin’s comment on the dollar, just a day ahead of Trump’s keenly awaited speech at Davos, is thus bound to raise concerns that the U.S. President could be in the brink of stepping up pressure on the trading partners of the U.S.”, she added.
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Losses for the United States currency have pushed the continued meteoric rise of the Euro, and a strong recovery by Sterling, into the shade while kicking nearly all other currency market happenings to the curb in the process. In the remarks, he said a “weaker dollar is good for trade”, in comments that pressured the currency.
They came days after the United States announced stinging tariffs on imports of solar panels and large washing machines, angering China and South Korea.
Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics in Washington, told AFP he was pleased to see Mnuchin favoring a weaker dollar.
In the New York Mercantile Exchange, gold futures for February rose to $1365.40 earlier in the day. It is perhaps slightly different from previous Treasury secretaries.
Mr Mnuchin’s comments sent the dollar index, a measure of the greenback against major peers, to its lowest since December 2014.
Asked about Mnuchin’s comments, European Central Bank President Mario Draghi on Thursday said that advanced economies have agreed to refrain from deliberate currency devaluation. “There are benefits and there are costs of where the dollar is, depending on which side of the table you are”, Mr. Mnuchin said. Steven Mnuchin during a panel discussion in Davos, Switzerland.
Among the market’s best performers, Dentsu is rising more than 4 percent, Sumitomo Metal Mining is gaining 3 percent and Toho Zinc is higher by nearly 3 percent. The ICE US dollar index fell nearly 10 percent in 2017 and is down 3 percent so far this year. The single currency was flat before Draghi started speaking.
Some analysts said the dollar selloff is overdone as the economy remains firm footing and the Federal Reserve is expected to raise rates further in 2018.
Asked whether there’s a resurgence in currency wars, Hammond replied “I hope not” and said Mnuchin is “obviously right that the softness of the dollar is helping US exports, USA manufacturers, reassert their position”.
Tuesday was a day in which the Australian dollar struggled to hold on to US 80 cents.
For the moment, nothing seems to stand in the way of the British Pound which opens higher once again in North America this morning at $1.4145 US, $1.7435 Canadian and $1.7540 Australia. Summers kinda sorta implies that the 1987 Black Monday stock market crash was due to James Baker’s threat to devalue the dollar, but I don’t know anyone who really believes that. It also generally reflects an improving US economy.
“A strong dollar has been very harmful and been going way too long”, he said. “Against the dollar, sterling has appreciated by 6.6 per cent since November 1, which is when the Bank of England raised interest rates”.
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“I think I’ve been quite consistent on the dollar”.
