President Donald Trump has tried to allay concerns over the plunging value of the US dollar, insisting that it will get “stronger and stronger”. He added, “ultimately I want to see a strong dollar. Our country is becoming so economically strong again and strong in other ways, too.”
Speaking at the World Economic Forum in Davos, Switzerland, Trump sought to push back on comments made by his appointed Treasury Secretary Steven Mnuchin. Earlier this week at the WEF, Mnuchin expressed the view that he would indeed welcome a weaker US dollar, on the basis it would boost US trade and export levels.
Mnuchin was reported to have told journalists at a Davos press conference, “obviously a weaker dollar is good for us as it relates to trade and opportunities”, while also saying that short-term value of the dollar was “not a concern of ours at all”.
The remarks were followed by a 2% fall of the dollar index, an index that measures the US dollar’s performance relative to six other major currencies. The dollar index was trading at 88.75 Thursday, after opening at almost 90 on Wednesday trading. Thursday’s dollar index performance was the worst in three years.
Trump’s comments seemed to provide markets with some temporary reassurance because the dollar index recovered and some of the losses caused by Mnuchin’s damaging remarks were erased. The dollar index was trading at 89.29 after Trump’s comments were reported.
Mnuchin was one of Trump’s more controversial cabinet appointments, approved by a slim vote of 53 to 47 by the Senate. Mnuchin was the national finance chair for Trump’s 2016 presidential campaign, coordinating and overseeing fundraising, but has no government experience and has faced criticism for his conduct during the 2008 financial crisis. Mnuchin had been leading the Mortgages department at Goldman Sachs when the toxic debt and mortgage products that spread risk throughout the financial system were created.
In an attempt to defend his Treasury Secretary, Trump said Mnuchin’s comments had been misinterpreted, “taken out of context” and did not reflect “his exact statement”.