Treasury Secretary Steven Mnuchin, under fire for comments he made earlier this week seemingly advocating a weak dollar, told CNBC on Friday the U.S. has a long-term interest in a strong greenback.
The dollar earlier had hit a three-week low on comments Mnuchin made Wednesday that the soft greenback would be better for the United States. Since then, he and President Donald Trump have said those remarks were taken out of context. Mnuchin and Trump spoke as they attended the World Economic Forum in Davos.
“I made the comment two days ago in a press gaggle in the morning. What I said was actually very even-handed and consistent with what I said before,” Mnuchin said Friday in an interview on CNBC’s “Squawk Box.” He added a strong “long-term dollar” is in the country’s best interests.
However, comments from the president and Treasury secretary did little to boost the dollar. In early trading, the currency was down about 0.4 percent against a basket of its global competitors, though it was off the lows of the session.
Mnuchin’s comments were nothing terribly new from the administration. Trump himself has said in the past that he prefers a weak greenback.
For his part, the Treasury secretary repeated that he is not trying to influence the currency markets.
“Had the news printed my entire transcript the first time as opposed to just taking out one little point and kind of imply that I was trying to talk down the dollar, which I wasn’t doing,” he said. “As a matter of fact I was very clear in my open, saying the dollar is the most liquid trading market in the world, and where the dollar is in the short term is not of concern to us, and we respect that the market sets where the dollar is.”
He added that it is not the policy of the administration to intervene in the currency markets.
Bank of America Merrill Lynch strategists also think the markets misinterpreted Mnuchin’s comments and should be focusing on what he said about the long-term dollar direction rather than the short-term market vagaries.
“Mnuchin’s statements, when taken in their entirety, reaffirm the existing strong USD policy by linking dollar value to relative US economic fundamentals … while implicitly acknowledging a more competitive and thus growth-supportive USD valuation situation vs. this time last year. Recent comments by President Trump would seem to confirm our read,” BofAML said in a note to clients.