US Treasury's Mnuchin says he has learned his lesson on dollar comments

  • Forex
  • Monday, 27 Jan 2020

US Steven Mnuchin

LONDON: U.S. Treasury Secretary Steven Mnuchin said he had learnt the hard way to be guarded in his comments on the dollar after roiling financial markets in 2018 by breaking from the usual language about the currency.

"I support a stable dollar but I'm not going to make more comments on that," he said at an event held at the Chatham House think tank in London.

Two years ago at the World Economic Forum in Davos, Mnuchin sent the U.S. currency reeling when he said he welcomed a weak dollar. More recently he has said he supported a stable dollar.

"One of the things I've clearly learned as treasury secretary, I'm very careful about my comments on the dollar, because two years ago in Davos, I sneezed, and I said something that I thought was completely calm, and all of a sudden the markets went crazy," he told the audience.

Speaking at the same event on Saturday, economist Jim O'Neill, a former Goldman Sachs chief economist, noted Mnuchin's choice of the word stable rather than the more traditional reference by U.S. treasury secretaries to their support for a strong dollar.

"I suspect by saying 'stable', that might mean for the rest of the world: Don't assume the dollar is always going to be going up," O'Neill said, adding: "That's my own subjective interpretation."

Mnuchin said that as the dollar is the reserve currency of the world, he was very conscious of the effect of sanctions on it, which he said were effective in helping to achieve national security goals.

"One of the things we balance, our European friends and allies may not always like what we're doing on sanctions, but I do seriously think we have a responsibility to use sanctions for important national security issues. But we need to think about the long-term impact on the global currency," he said. - Reuters

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