Mnuchin Says Weaker Dollar Is Good for US Due to Trade

A teller counts U.S. dollars at a money changer in Jakarta Indonesia

A teller counts U.S. dollars at a money changer in Jakarta Indonesia

"A weaker dollar is good for trade", Mnuchin said, adding that "in the longer term, a stronger dollar is a reflection of the strength of the United States economy".

After broadcasting that President Trump wouldn't hold back from his "America First" posture when he addresses billionaires and world leaders at Davos, Mnuchin said he wasn't anxious about the response.

"A weaker dollar is good for us as it related to trade and opportunities", Mnuchin told reporters on Wednesday at the World Economic Forum in Davos, Switzerland. GE also forecast more weakness at its power business this year, a unit that produced 60 percent of profits as recently as 2016.

In U.S. stocks, the S&P 500 ended down slightly as Ross' comments fueled worries of a trade war.

"Treasury secretaries in the past have always spoken in favor of a stronger dollar, not a weaker dollar", said Sireen Harajli, currency strategist at Mizuho in NY. "The president has always believed in that".

"Currently we have a very stable dollar because of how well the doing, and it's as powerful as it's ever been", she said Wednesday at a briefing in Washington.

The annual Davos gathering of world leaders, chief executives and non-governmental agencies has long embraced globalization, free trade and liberal values.

Trump has upset global markets during his first year in office, including dropping the USA out of the Trans-Pacific Partnership trade deal between 12 Asian, North American and South American countries.

During his trip, Trump will give an address to the forum and meet with foreign leaders.

Italian Prime Minister Paolo Gentiloni, asked what his message to Trump was, offered a defense of multilateral cooperation and warned against undermining that.

It's day two at the World Economic Forum and there'll be no escaping Europe.

"This is about an America First agenda. But America First does mean working with the rest of the world", Mnuchin continued.

Trump is expected to speak there later this week.

As the Wall Street Journal wrote Wednesday, the U.S. government does not directly set the value of the dollar, but policies on tax, trade, as well as the recent appointment of Jerome Powell as Fed Chair, have an indirect impact on the dollar's strength.

Resetting the world's perception of Trump is likely to be hard.

While acknowledging that it is legitimate for each country to say "My country first", Italian Prime Minister Paolo Gentiloni said trade was the means towards economic growth - and that protectionism runs counter to that.

U.S. Commerce Secretary Wilbur Ross has conceded that China could slap retaliatory tariffs on U.S. products following President Donald Trump's decision this week to impose tariffs on imported solar-energy components and large washing machines. A weaker dollar makes US products more competitive in global markets. Delegates include Jared Kushner, Trump's son-in-law and adviser.

The peso had already been showing strength for much of the new year.

But he added, "We are fans of bilateral trading agreements". He opened his speech Tuesday by announcing Canada had finalized a major trade deal with 10 Asia-Pacific countries.

Those tax reforms, Mnuchin said, have already reaped big dividends, with many USA businesses, including Apple, saying they will repatriate money back into the US, pay more taxes and hand out bonuses to staff. Perhaps there was some inclination to use that to "put pressure on the the NAFTA talks", Ross said.

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