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Friday, July 30, 2021

US Does Not Intend to Intervene on USD Yet


US Treasury Secretary Steven Mnuchin said The Trump Administration does not intend to intervene in the USD market now, but signaled he prefers any future move be coordinated with the Fed and global allies.

The Treasury Department has “no intention of intervention at this time. Situations could change in the future but right now we are not contemplating an intervention,” Secretary Mnuchin said Wednesday.

The Trump Administration has considered measures to counter USD’s strength, including direct intervention. Officials said last month that intervention had been ruled out for the time being, though President Trump has continued to lament the Buck’s strength.

President Trump has raised concerns about the value of USD relative to economic competitors especially China, with which the US has been engaged in a trade dispute.

With a strong USD, US manufacturers have a harder time selling their products abroad as their wares are more expensive for foreign customers. US consumers, meanwhile, can afford more imports, widening trade deficits President Trump has vowed to close.

President Trump is holding out for the Fed to cut interest rates, which would automatically bring down USD a bit.

Stay tuned…

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