US Dollar Index Dumps as Trump's Treasury Secretary Nominee (Steve Mnuchin) Says 'Strong Dollar' Not Always Good For America



The US Dollar Index was rocked into the close of the NY trading session as President Trump’s Treasury Secretary Nominee, Steve Mnuchin, told the Senate that a strong dollar may not always be beneficial to the economy.

According to a Bloomberg report, Mnuchin wrote:
“The strength of the dollar has historically been tied to the strength of the U.S. economy and the faith that investors have in doing business in America. From time to time, an excessively strong dollar may have negative short-term implication.”
Mnuchin’s remarks sent the Dollar Index tumbling down to a low of 99.94 - a price not seen since December 8, 2016. The Dollar Index recovered a bit during the final minutes of the trading day, closing at 99.99.



The unexpected news also hit several Forex pairs quite hard, with the biggest drop taking place on the USD/JPY pair, which dropped 0.43% in the last 30 minutes of the NY trading session.



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1 comment :

  1. One of the first things you learn when studying international trade, is that a weak currency strengthens exports and weakens imports. Furthermore, given the massive foreign debt of the United States a weakening of the currency, and an inflationary policy in general would greatly benefit the US. The big loser would be China with its huge US dollar holdings.

    Whilst the Trump administration will want to avoid any drastic flight from the dollar, it is likely that over time it will attempt to reduce the dollar value, thus strengthening the home market at the expense of foreign debtors.

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