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The US currency jumped on Wednesday morning after US Treasury Secretary Scott Besant said the Trump administration was still pursuing a “strong dollar policy” and was not seeking to intervene to boost the Japanese yen.
In an interview with CNBC, Besant said she expected the US currency to appreciate, after which the dollar jumped 0.8 per cent against the euro and 1 per cent against the yen.
“The United States has always had a strong dollar policy, but a strong dollar policy means setting the right fundamentals,” Besant said. He said the administration’s policies are making the US “the best place to come to.”
“If we have solid policies, there will be money inflows and we are reducing our trade deficit, so automatically the dollar should strengthen over time,” Besant said.
The comments come after US President Donald Trump said on Tuesday evening that the US currency’s recent slide was a “great” development, sending the dollar to its lowest level in four years against its peers.
The dollar has fallen nearly 2 percent this year amid speculation that the U.S. Treasury is considering intervention in foreign exchange markets, after it emerged that the New York Federal Reserve had placed a rate check on the dollar-yen exchange rate on behalf of the administration on Friday.
Rate checks are often seen as a precursor to foreign exchange intervention.
Asked whether the US Treasury was intervening in foreign exchange markets to prop up currencies against the dollar, Besant replied “absolutely not”.
When asked whether intervention was taking place, he said: “We have no comment other than to say that we have a strong dollar policy.”
This is a developing story
