Dollar tanks after Mnuchin says a weaker currency is good for US trade
- The dollar added to its losses and was at a three-year low on Wednesday after Treasury Secretary Steven Mnuchin was beneficial to US trade.
- "Obviously a weaker dollar is good for us as it relates to trade and opportunities," he told reporters in Davos, according to Bloomberg.
- The dollar was already under pressure this year amid concerns that the Trump administration would take a more protectionist approach to trade.
The dollar added to its losses and was at a three-year low on Wednesday after Treasury Secretary Steven Mnuchin said a weaker currency was beneficial to US trade.
"Obviously a weaker dollar is good for us as it relates to trade and opportunities," Mnuchin told reporters at the World Economic Forum in Davos, according to Bloomberg.
He added that the short-term value of the dollar was "not a concern of ours at all."
A weaker currency makes dollar-denominated products more attractive to buyers with other currencies. President Donald Trump said last April that the dollar was "getting too strong" and would ultimately hurt the US economy.
The US dollar index, which tracks the greenback against a basket of other major currencies, fell by 0.6% to 89.31, its lowest level since December 2014.
The dollar was already under pressure this year amid concerns that the Trump administration would take a more protectionist approach to trade. In 2017, the first full year of Trump's presidency, the dollar had its weakest year since 2003.
Trump is expected to speak in Davos on Friday.
"The extended selloff of the buck is likely a reflection of the introduction of tariffs and other drama in Washington," said Mark McCormick, the North American head of FX strategy at TD Securities, in a note.
"History shows that the FX market does not respond kindly to acts of protectionism, which reinforces our expectations of the steady unwind of the dollar bull market."