President Donald Trump dismissed concerns regarding the value of the U.S. Dollar, as it falls to multi-year lows, while reviving long-standing complaints on the foreign exchange practices of China and Japan.
The Dollar Is ‘Doing Great’
Speaking with reporters in Iowa on Tuesday, Trump rejected the premise that the dollar had declined “too much,” while adding that the Greenback was “doing great,” even as the U.S. Dollar Index (DXY) dropped to a four-year low of 95.66 against a basket of other currencies.
The currency is down 2.09% over the past month, and 10.6% since Trump took office last year, amid growing fiscal, macroeconomic and monetary uncertainties.
Trump framed the question as a matter of trade competitiveness, pointing to the currency devaluation practices of China and Japan over the years.
“If you look at China and Japan, I used to fight like hell with them because they always wanted to devalue,” he said, adding that it made it harder for American companies to compete due to such practices. “But they always fought.”
Economists Warn of Rising Prices
Anna Wong, the Chief Economist at Bloomberg, said that “Trump is not a strong dollar guy,” noting that he has “stated his position” on this matter “for years.”
Wong said the move could benefit U.S. companies with overseas exposure, saying, “the multinational firms on S&P 500 are also probably loving it,” as a weaker dollar makes American exports more competitive, which is in line with Trump’s claims on the decline.
Economist Peter Schiff, on the other hand, criticized Trump’s claims, asking why the “hottest” economy in the world has the “coldest currency.”
Schiff also noted that, in addition to the dollar falling to its four-year low against a basket of global currencies, “it fell to another all-time low against the Swiss franc,” while warning that, as the currency continues to decline, “U.S. consumer prices and long-term interest rates will rise.”
The Invesco DB US Dollar Index Bullish Fund (NYSE:UUP), which tracks the U.S. Dollar Index, was down 1.16% on Tuesday, closing at $26.47 a share, and is down 9.38% over the past year.
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