Confirming the Trump administration’s stark departure from Clinton-era policies to achieve a stronger US dollar, Treasury Secretary Nominee Steven Mnuchin’s written responses to Senate questioning brought about an unexpected response. Unlike Timothy Geithner and Jack Lew who predominantly focused on external currency manipulators such as China, Mnuchin mirrored Trump’s sentiment that the dollar was too strong to be competitive, potentially bringing about near-term shocks. Although he confirmed that long-term strength was vital, short-term, the impact could be highly detrimental to economic activity. However, Mnuchin still faces an uphill battle with Democrats fighting his confirmation amid revelations that he has extensive offshore investment holdings. The reaction in the dollar was notable following the remarks, with GBPUSD taking a further climb before reversing course lower overnight.
US Treasury Secretary Nominee Talks Down Strong Dollar
Daily Analysis - 24/01/2017