LONDON (Reuters) - U.S. President Donald Trump is “absolutely not” trying to talk down the strength of the dollar, Treasury Secretary Steven Mnuchin was quoted as saying in the Financial Times on Wednesday.
Trump said last week in an interview with the Wall Street Journal that the dollar was “getting too strong”, and backed away from labelling China a currency manipulator.
Mnuchin had played down that comment on the dollar in an interview first published late on Monday in the FT. In a more detailed version published on Wednesday, he directly rejected the idea that Trump was trying to talk down the dollar, saying “Absolutely not, absolutely not.”
The dollar gained after Mnuchin’s initial remarks late on Monday.
But on Wednesday the euro hit a three-week high as the dollar was weakened by doubts over a fiscal boost promised by the president and by the pricing out of bets on three U.S. Federal Reserve interest rates hikes this year.
Mnuchin also said the Trump administration did not deem foreign countries to be manipulating their currency if they did so in a way that benefited Washington.
“To manipulate a currency you have to be doing it to disadvantage the United States,” he said.
Trump campaigned on a promise to label China a currency manipulator - something that could pave the way for higher U.S. tariffs - but his administration decided not to do so in a report published on April 13.
The Treasury report recognised what many analysts have said over the past year, namely that China has recently intervened in foreign exchange markets to prop up the value of the yuan, not push it lower to make Chinese exports cheaper.
Finance ministers and central bank chiefs meet in Washington this week for the International Monetary Fund’s twice-yearly meetings. Mnuchin said addressing currency swings was “one of the IMF’s most important roles”.
Reporting by David Milliken; Editing by Louise Ireland and John Stonestreet