President Donald Trump is continuing to proclaim his dislike of a strong dollar, breaking with the traditional practice of presidents not commenting on the American currency.
“I like a dollar that’s not too strong,” he said, according to a Wall Street Journal interview transcript posted by Politico.
“I mean, I’ve seen strong dollars. And frankly, other than the fact that it sounds good, lots of bad things happen with a strong dollar,” Trump said, according to the transcript.
“I do like low interest rates. I mean, you know, I’m not making that a big secret. I think low interest rates are good,” he said.
Meanwhile, the U.S. dollar on Wednesday hit its lowest level against the euro in more than 2-1/2 years on uncertainty over the path of interest rate hikes for the Federal Reserve this year and expectations for European Central Bank hawkishness, Reuters reported.
Tepid U.S. inflation along with political turmoil in Washington has lessened the possibility of another Federal Reserve rate hike this year. Improving data in other major economies has also served to push the greenback down nearly 11 percent from January highs, benefiting commodities and emerging markets.
The dollar index fell 0.37 percent, after touching 92.548, the lowest since early May 2016.
A softer dollar boosts the purchasing power of overseas customers looking to pick up American-made goods and increases the value of profits that U.S. companies earn abroad.
That’s shown up in the earnings and share prices of large, internationally focused companies, Bloomberg reported.
It’s also expected to contribute to the next leg of the emerging bond rally by giving some central banks more room to ease policy.
“A weaker dollar — and therefore stronger local currencies — has helped provide a cap to local inflation. That has kept inflation expectations low locally, which has been supportive for bond prices,” said Mike Moran, head of economic research for the Americas at Standard Chartered Plc.
Meanwhile, Trump also has changed his tune about Federal Reserve Chair Janet Yellen, telling the Journal she has done “a good job.”
Even though the Fed has approved three rate hikes since the election, the dollar has fallen and government bond yields have remained low as well.
During the campaign, Trump said Yellen should be “ashamed” of her actions, which he said helped prop up the economy under former President Barack Obama. Trump told WSJ.com last week that she he thinks she has done “a good job,” according to the transcript.
“I like her. I like her demeanor. I think she’s done a good job. I’d like to see rates stay low. She’s always been – you know, she’s historically been a low-interest-rate person, a believer,” he said.
Trump, however, declined to reveal whether he would reappoint Yellen when her term expires in February. Various names have been floated as her replacement, among them Gary Cohn, the former Goldman Sachs executive who now is the president’s chief economic adviser, Bloomberg cited the Journal as reporting last week.
Trump said Cohn “certainly would be in the mix” though he said others are being considered as well, CNBC reported.