Treasury Secretary Promises Economic Growth and Tax Relief
- Author: Zachary Reyes Feb 24, 2017,
Feb 24, 2017, 12:05
Mnuchin injected an element of calm Thursday, signaling the administration won't rush to label China a currency manipulator.
The dollar struggled to recover Friday and Asian markets suffered fresh losses after Treasury Secretary Steven Mnuchin lowered U.S. growth expectations and appeared to temper Donald Trump's belligerence towards China's currency policy.
Since Trump's election, however, China has allowed the yuan to strengthen against the dollar.
Treasury Secretary Steven Mnuchin stepped back from the tough rhetoric on China's yuan-valuation strategies, at least for now.
Mnuchin added that it is the Trump administration's aim to reach a "sustainable growth of 3% or more", and that the goal is to reach that target at sometime in 2018.
Asked about a proposed border adjustment tax on imports, Mnuchin said, "we are looking at it". "We'll do that as we have in the past, and we're not making any judgements until we continue that process". "We'll do that as we have in the past".
"The logic of Trump's claim is that he believes other countries keep their currencies artificially cheap to increase their exports to the US".
"Certainly they are manipulators".
USA stocks edged higher on Thursday, buoyed by energy stocks and a renewed pledge by President Donald Trump to chief executives of major US companies to bring back millions of jobs to the United States. "We'll see what happens".
Trump's comments often disagree with both his own cabinet members and reality.
"This could ease some of the trade war concerns for the Asian region which has been one of the main factor weighing on investor's mind since the U.S. elections", she added.
Mnuchin, a former hedge fund manager and partner at Goldman Sachs, is facing the hard job of squaring his boss' view of China's currency with reality.
The dollar index, which measures its broader strength against a basket of other currencies, was marginally higher on the day at 101.32. Although the designation doesn't trigger immediate penalties, some experts fear it could be used as a first step toward imposing the heavy tariffs that Trump threatened China with during his campaign.
The International Monetary Fund said in July that it thought the yuan's value was "broadly in line with fundamentals".
The dollar fell as much as 0.6 percent against the yen to a two-week low of 112.55 yen JPY=, while the euro rose as much as 0.4 percent against the dollar to $1.0595 EUR=.