image

Currencies

Trump’s Treasury choice believes dollar strength important

PUBLISHED : Friday, 20 January, 2017, 4:05am
UPDATED : Friday, 20 January, 2017, 4:05am

Treasury Secretary nominee Steven Mnuchin told lawmakers the long-term strength of the US dollar is important and said President-elect Donald Trump’s comments that the currency was too high weren’t meant as a longer-run policy.

The dollar’s “long-term strength -- over long periods of time -- is important,” Mnuchin said in response to questions at his confirmation hearing Thursday before the Senate Finance Committee in Washington.

“The US currency has been the most attractive currency to be in for very, very long periods of time. I think that it’s important and I think you see that now more than ever.”

At the same time, he said the greenback is currently “very, very strong, and what you see is people from all over the world wanting to invest in the US currency.”

The currency has appreciated more than 5 per cent since Trump won the November 8 election on expectations he will boost economic growth through tax cuts and spending increases.

Trump expressed concern about the dollar’s recent appreciation in an interview with the Wall Street Journal this month, saying the currency was “too strong.” That prompted speculation that his administration might reverse longstanding tradition in the US to support a strong-dollar policy.

“When the president-elect made a comment on the US currency, it wasn’t meant to be a long-term comment,” Mnuchin said. “It was meant to be that perhaps in the short term the strength in the currency, as a result of free markets and people wanting to invest here, may have had some negative impacts on our ability in trade.”

US dollar hits 4-week low on Trump; sterling set for biggest rise since 2008 on PM May’s speech

Earlier in the hearing, Mnuchin departed from the text of his prepared testimony to say he “will enforce trade policies that keep our currency strong on the world exchanges and create and protect American jobs.” The line in his written statement reads: “I will enforce these trade policies that keep and protect American jobs.”

Lawrence Summers, who served as US Treasury secretary under Bill Clinton and was President Barack Obama’s chief economic adviser, said this month that Trump policies that help strengthen the dollar would hurt US exporters and the people who work for them, working against Trump’s goals.