Trump praises strong US dollar but does not rule out intervention, Latest Business News - The New Paper

Trump praises strong US dollar but does not rule out intervention

This article is more than 12 months old

WASHINGTON President Donald Trump sent more confusing messages to financial marketson , hailing the strong US dollar but refusing to rule out an intervention.

That appeared to contradict comments from a top economic adviser just hours earlier, who said the White House had ruled out a move to weaken the dollar.

Mr Trump told reporters: "The dollar is very strong. The country is very strong. The dollar is a beautiful thing in one way but it makes it harder to compete."

But when asked why he had ruled out taking action when it was discussed at a meeting with his economic team on Tuesday, Mr Trump said: "I can do that in two seconds. I didn't say I am not going to do something."

Mr Trump has repeatedly accused countries such as China and Germany of taking advantage of weaker currencies to boost exports to the US. But according to a report in Politico on Friday, he smacked down a push by White House trade hardliner Peter Navarro to weaken the dollar to compensate.

Mr Larry Kudlow, head of the White House National Economic Council, had told CNBC earlier on Friday that despite persistent concerns about actions by other countries to influence their currencies, "we have, as a matter of policy, ruled out currency intervention".

The fact that the White House was even discussing intervention was a bombshell to some economists.

"The administration was seriously considering currency intervention. ... That in itself is extremely concerning," Mr Gregory Daco of Oxford Economics said on Twitter. "I see this as a key risk over the next 12 months."

Mr Adam Posen, who leads the Peterson Institute for International Economics, said Mr Kudlow felt obliged to go on record about White House policy amid increased recent speculation that Mr Trump was considering launching an effort to move exchange rates. - AFP