Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Trump adviser says currency intervention off the table; Trump less clear

Published 07/26/2019, 07:10 PM
Updated 07/26/2019, 07:10 PM
Trump adviser says currency intervention off the table; Trump less clear

By Makini Brice and Steve Holland

WASHINGTON (Reuters) - The Trump administration has "ruled out" intervening in markets to lower the U.S. dollar's value, even though President Donald Trump is concerned other countries are weakening their currencies to gain a trade advantage, a top White House adviser said on Friday.

"Just in the past week, we had a meeting with the president and the economic principals and we had ruled out any currency intervention," White House economic adviser Larry Kudlow told CNBC.

White House adviser Peter Navarro, a trade hard-liner, presented Trump on Tuesday with ideas on how to devalue the dollar as a way to pressure China in an ongoing trade fight, according to a source familiar with the matter, confirming a Politico report, which said the president quickly dismissed the proposals.

Asked why he had decided not to act on them, Trump told reporters at the White House, "I didn't say I’m not going to do something."

Trump has publicly complained about the strength of the dollar, saying it hurts American competitiveness, but Kudlow disputed an assertion that the president wanted a weaker greenback. Rather, he said, other currencies should be stronger.

"I don't agree with your assertion that the president wants a weak dollar," Kudlow said. "What the president is concerned about is that foreign countries may be manipulating their own currencies lower to try to gain some short-term, temporary trade advantage."

Kudlow told reporters later on Friday that the president wanted a steady dollar.

Trump, in his remarks to reporters, suggested he welcomed the dollar's strength in so far as it is an emblem of a strong economy, even though it curbs U.S. exports.

"The dollar is very strong. The country is very strong," he said. "It's a beautiful thing in one way but it makes it hard to compete."

"We have a very powerful dollar ... It's really become, more than ever before, the currency of choice," Trump added, citing weakness in the euro. He also said China's yuan was "very low."

In a tweet on Monday, Trump complained that it was "very unfair that other countries manipulate their currencies." He has blamed the U.S. Federal Reserve's interest rate policy for much of the dollar's strength and has been jawboning the central bank to cut rates at its two-day meeting next week.

"The Federal Reserve raised the rates too fast and too soon," Trump lamented on Friday.

The central bank had been raising rates through the end of last year, and the substantial gap between U.S. borrowing costs and those in other developed economies has been seen as a contributor to the dollar's strength. But, in response partly to what it sees as headwinds from Trump's trade policies, the Fed is now expected to cut rates for the first time in more than a decade.

In the last 12 months, the ICE (NYSE:ICE) U.S. dollar index (DXY) has gained about 3.5%, largely due to gains against the euro (EUR=). On Friday, the index touched the highest in two months and was less than 0.5% from its strongest levels in more than two years.

Against China's yuan , it has risen by about 1.4% over the last 12 months, much of that coming in May after Trump raised tariff rates on billions of dollars of Chinese imports.

Latest comments

Allowing gold to rise would be a nice first test
This means get ready they are about to do just that.
I love it better when we have low interest rates and the carry trade is free money. Low rates me cheaper options, margin, and other ways to make a buck.
We like a strong dollar
if they say that they ruled out that means it's their priority. $$ will go to 94
Indian currency rupee is the highest manipulated currency do something about it
Bro dollar may rise more.. but what about INR.. how itu0027s becoming stronger..
Mayby dollar is next :D
next week DX will fall
what do commodities do if he bows to trump and what do they do if he doesnt? Theres no reason to cut rates when the market is a at an all time high
Drivel.
LOL. Artificial interventions never work in the long run. Indeed, if fundamentals matter, everytime FED cuts rates, dollar appreciates.
This means they are about to step in so lookout
Lol with the spread between eur/us yields what do you expect ? The banksters get the cheap money in Europe and invest in US. Why the US market is getting higher and higher with no volume. For sure they are buying dollars and is getting stronger.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.