President Donald Trump would like the U.S. dollar to be strong.
Speaking to CNBC at the World Economic Forum in Davos on Thursday, Trump responded to Treasury Secretary Steven Mnuchin’s comments from earlier this week that a weaker U.S. dollar would be good for the U.S. economy.
“I think [Mnuchin’s comments] were taken out of context,” Trump told CNBC’s Joe Kernan.
“I don’t like talking about [the value of the dollar] because, frankly, nobody should be talking about it. It should be what it is,” Trump said. “[The dollar’s value] should also be based on the strength of the country. We are doing so well. Our country is becoming so economically strong again. And strong in other ways too, by the way, that the dollar is going to get stronger and stronger.
“And ultimately I want to see a strong dollar.”
As of Thursday afternoon, the dollar was trading near its weakest level since late 2014 according to the Bloomberg Dollar Index. In 2014 and into 2015 the value of the dollar spiked as the price of oil declined and the global economy was soft relative to the recovery the U.S. had seen since the financial crisis.
Trump’s comments, however, did push the Dollar Index higher after the dollar plummeted earlier in the day following comments from European Central Bank president Mario Draghi.
On Wednesday, Mnuchin told reporters in Davos that, “A weaker dollar is good for us as it relates to trade and opportunities.”
In 2017, the dollar declined at its fastest rate since 2013 as the U.S. stock market had a stellar year and the economy grew at its fastest pace since 2011. The dollar still remains stronger than it was for most all of the decade between the tech bubble bursting and the post-financial crisis recovery.
A weak dollar, as Yahoo Finance’s Dion Rabouin noted Wednesday, is a benefit to multinational corporations as it makes U.S. exports more attractive, but a weaker dollar also hurts the purchasing power of U.S. based consumers and businesses.
Mnuchin, like Trump, however, noted that over the long run, the strength of a country’s currency is a reflection of the strength of its economy. And right now the U.S. dollar is largely falling in response to its relative economic pace of growth falling short of many international counterparts, notably Western European economies.
And with international trade tensions emerging as the biggest theme of Davos, comments from multiple U.S. officials on the dollar’s value will muddy the waters when it comes to deciphering what the Trump administration means by insisting that it must have “better” trade agreements. Trump on Thursday also left open the possibility of re-considering the U.S.’s membership in the Trans-Pacific Partnership, but only if it were as part of a “substantially better deal.”
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Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland
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