Mnuchin Says His Dollar Policy Isn't Aimed at Jawboning It Lower
(Bloomberg) -- The U.S. currency policy used to be just a few words: A strong dollar is in the country’s best interest. It’s become more of a mouthful under Treasury Secretary Steven Mnuchin, who wonders why he’s misunderstood.
“Let me be very clear: I absolutely support a strong dollar as being in the long-term best interest of the country, and I strongly support -- we have a free currency market that we don’t intervene in and have relied upon the most liquid market in the world,” he said in testimony Tuesday to the Senate Banking Committee. “So the short term is not a concern of us.”
With that comment, Mnuchin tried to resolve an issue that’s roiled currency markets in recent days. On Tuesday, Mnuchin recounted to lawmakers how in Davos, Switzerland, last week he gave a press briefing and delivered a three-part comment “that was extremely balanced and very specific,” adding that it was “not anything new.”
The press, he said, focused on one aspect and kept on playing it over and over -- an apparent reference to his line that “obviously a weaker dollar is good for us as it relates to trade and opportunities.” The dollar fell before recovering, drawing a rare rebuke of the U.S. by European Central Bank President Mario Draghi.
Back in the U.S. this week, Mnuchin tried to clarify his intent. “It was no way intended to talk down the dollar whatsoever,” he said.
Markets might be starting to listen: The dollar strengthened as the secretary delivered his testimony.
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