The dollar advanced on Wednesday against the euro and the yen after Treasury Secretary Steven Mnuchin assured the public that President Donald Trump is “absolutely not” trying to talk down the greenback.
The ICE U.S. Dollar Index DXY, +0.21% a popular gauge of the dollar’s strength against a basket of six rivals, climbed 0.2% to 99.68, while the WSJ Dollar index BUXX, +0.28% which gauge’s the dollar’s strength against a broader basket of rivals, rose 0.2% to 89.67.
The euro EURUSD, -0.1025% was essentially flat at $1.0727, while the dollar USDJPY, +0.55% climbed to ¥108.92 in recent trade, compared with ¥108.42 late Tuesday in New York.
Mnuchin’s comments, which appeared Wednesday in a transcript of an interview he gave to the Financial Times, were a response to President Donald Trump’s remark, which appeared last week in The Wall Street Journal, that the dollar is getting “too strong.”
Neil Mellor, a currency strategist at BNY Mellon, said the back-and-forth is another example of how Trump’s advisers try to clarify and refine some of his more controversial remarks. Typically, the U.S.’s position on the dollar is articulated by the Treasury.
“[Mnuchin’s] job is, as always, to try and impose a suitable filter [on Trump],” Mellor said, adding that investors shouldn’t take Trump’s words as gospel. The U.S. dollar surged after Trump’s upset victory in the Nov. 8 U.S. election, but has since retraced much of that move. Mellor noted that, despite the currency’s weakness since the beginning of the year, futures-market positioning suggests appetite for the greenback remains robust.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.