A day after sending the dollar reeling with comments supportive of a weak U.S. currency, U.S Treasury Secretary Steven Mnuchin said the Trump administration was not seeking a trade war but would defend its economic interests, Reuters reported.
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 USA exports, US manufacturers, reassert their position".
THE Singapore dollar hit a three-year high against the US dollar as equity markets fell and gold rose after US Treasury Secretary Steven Mnuchin said that a weaker greenback would be positive for the US economy. Trump has made no secret of the fact that his administration prefers a weaker USA dollar to boost trade.
"There are benefits of where the dollar is and there are costs of where the dollar is", the Treasury secretary said at another panel Thursday, adding that the short-term dollar position was "not a concern of mine".
Speaking at a press conference at the World Economic Forum in DavosWednesday, he made a bid for investment into the US, saying the government was committed to growth of 3 percent or higher.
Mnuchin said Thursday that he was not concerned by short term fluctuations in the dollar.
"Currently we have a very stable dollar because of how well the USA is doing, and it's as powerful as it's ever been", White House spokeswoman Sarah Sanders said on Wednesday at a briefing in Washington. The FTSE 100 is the sole major blue-chip index to have slipped back into the red and miss the global stocks rally this year while conversely, the pound is the top performing G10 currency against the dollar in the last six months. So I think it's very clear.
Then in just four hours, the local currency fell by 1 per cent (or 0.8 USA cents).
It was an inopportune time for Mnuchin to weigh into currency markets as the dollar already had weakened since Tuesday, after Trump signed fresh protectionist measures against China and South Korea.
Bloomberg data revealed that as of 11.09 am, the Singapore dollar was trading at 1.306 to the United States dollar, the highest since it closed at 1.3044 on November 28, 2014.
Ross said that more trade actions are in the pipeline. "You run the risk of not just talking down the dollar but talking people out of buying USA equities and US bonds as well", High Frequency Economics' Jim O'Sullivan told Politico of Mnuchin's comments.
Trump too has signaled his preference for a softer dollar.
At the same time, a declining dollar means imports and commodities like oil, which are priced in dollars, will cost more for USA consumers.