ZURICH (Reuters) - Swiss National Bank Chairman Thomas Jordan said on Thursday he does not think a currency war is imminent after U.S. Treasury Secretary Steven Mnuchin said a weaker dollar helped his country’s exporters.
Jordan declined to respond to Mnuchin’s comments that a weaker dollar benefited U.S. trade balances in the short term which sent the greenback to multi-year lows.
But Jordan told CNBC in an interview on the sidelines of the World Economic Forum in Davos, Switzerland, that the effect of comments on currencies has been amplified due to the global low interest rate environment.
“Every time monetary policy changes somewhere, the spillovers are bigger than in the past, because the interest rate instrument is not available as it used to be,” Jordan said in an interview.
“Maybe we should not focus on daily volatility,” Jordan added. “Usually the foreign exchange market will refocus on fundamentals again and also correct again.”
The U.S. economy was very strong, “probably the strongest in the world and the most advanced in the cycle,” Jordan said, who earlier said robust U.S. growth and U.S. interest rates that are higher relative to elsewhere should support a strong dollar.
The SNB’s policy to check the rise of the Swiss franc still hinges on negative interest rates and a readiness to intervene in the foreign exchange markets, Jordan added.
“What we don’t look at is specific exchange rates,” he said. “We look at all the exchanges together and see what is the impact on the Swiss economy and then, if necessary, decide whether to intervene or not.”
Reporting by John Revill, editing by John Miller Editing by Jeremy Gaunt.