Mnuchin Backs Weak-Currency Comments After Lagarde Demands Clarification

Following speculation that Steven Mnuchin's market-moving Wednesday comments were misconstrued, with none other than Wilbur Ross saying that the Treasury Secretary did not suggest the US was now pursuing a weak-dollar policy, Mnuchin was back on the wires again this morning in a panel appearance at Davos, where he mostly repeated his previous comment, stating that "a weaker dollar is good for us as it relates to trade and opportunities," and in terms of trade imbalances, which of course is factually true although it was still unclear if equates with new US policy. For the answer, we may need Trump who just landed at Davos, to weigh on that.

Addressing whether the US has a dollar target he said, "My comments have been that in the short term, where the dollar is not a concern of mine, that it will fluctuate. In the short term there’s obviously benefits and issues of a lower dollar."

After that confusion "explanation", Mnuchin was confused how there could be any confusion over his remarks: "I thought my comment on the dollar was actually quite clear yesterday, I thought it was balanced and consistent with what I said before" he told reporters in Davos. He further said that "It’s a very very liquid market and we believe in free currencies. There’s both advantages and disadvantages on where the dollar is in the short term."

Addressing the elephant in the room, he said that "we want free and fair and reciprocal trade. So I think it’s very clear. We’re not looking to get into trade wars. On the other hand we are looking to defend America’s interests."

Mnuchin's clarification came shortly after IMF Managing Director Christine Lagarde spoke to Bloomberg at Davos and said USD value is determined by the market, while suggesting that Mnuchin should explain his comments in which he appeared to back a weak dollar, adding that U.S. tax cuts will probably cause the world’s reserve currency to rally.

"I really hope that Secretary Mnuchin has a chance to clarify exactly what he said,” Lagarde said. "The dollar is of all currencies a floating currency and one where value is determined by markets and geared by the fundamentals of U.S. policy."

She also said that trade is a very significant engine of growth and protectionist measures don't help trade or growth.

* * *

And then, just to make things even more confusing, Mnuchin said in another panel discussion that he thinks that "Trump shares a relaxed view on the dollar" suggesting that a weaker dollar is in fact a matter of US policy.

Whether Mnuchin's "clarification" was meant to boost the dollar or to double down on his "weak dollar" policy was unclear, but while the Bloomberg dollar index staged a feeble rally around the time of Mnuchin's comments it has resumed its slide, and continued to trade at three year lows.


HenryKissinger… smc1982 Thu, 01/25/2018 - 07:29 Permalink

magic number 7 Lagarde ???

and WHY does he have to answer to her? who the fück is she?

"7" references:

1:22 - "Now I'm going to test your numerology skills by asking you to think about the magic seven"
1:34 - "Most of you will know that seven is quite a number
2:24 - "2014, you drop the zero, fourteen, two times, seven"
4:08 - "It will mark the 70th anniversary, 70th anniversary, drop the zero, seven, of the Bretton Woods Conference that actually gave birth to the IMF" (7 + 0 = 7)
4:22 - "And it will be the 25th anniversary of the fall of the berlin wall, 25th.." (2 + 5 = 7)
4:38 - "It will also mark the 7th anniversary of the financial market jietters"
5:08 - "After those seven miserable years, weak and fragile"
5:14 - "We have seven strong years"
5:43 - "Now I don't know if the G7 will have anything to do with it" (G is also the 7th letter of the alphabet)

"2014" references:

1:18 - "The global economy and what we should expect for 2014"
2:19 - "So if we think about 2014"
2:24 - "2014, you drop the zero, fourteen, two times, seven"
3:54 - "So 2014 will be a milestone and hopefully a magic year in may respects"
5:05 - "So my hope and my wish for 2014"

In reply to by smc1982

BritBob Thu, 01/25/2018 - 06:26 Permalink

“My country isn’t a soccer team!” harrumphed Cristina Fernández at the UN, after Christine Lagarde, the International Monetary Fund boss, threatened Argentina with a red card in the form of official censure unless it improved its dodgy official statistics.

Unfortunately President Macri persists with some dodgy claims too...

Falklands - Argentina's Imaginary Territory (1 pg):-


Davidduke2000 Thu, 01/25/2018 - 06:49 Permalink

the dollar was doomed because of all that printing, it is easy to figure it out.

if a company has 1 million shares  at 100 /share and you increase the float  by 5 million shares, the shares would drop to $20/share, but for the dollar, the central bank printed $20 trillion dollars and because the same central bank was buying these same dollar it printed it remained very high artificially while inflation soared, and now were are seeing the real value of the dollar even though the central bank is still buying the dollar to stop the hemorrhage.

the true value of the dollar is 20 cents, as inflation continue to soar , we may reach it within a couple of years as there are  alternative to the dollar and people are moving in that direction.

El Hosel Thu, 01/25/2018 - 07:03 Permalink

Did she say the Dollar is less rigged than other currencies? That fundamentals matter?

"I hope she gets a chance to clarify exactly what she meant by that".

Global Hunter Thu, 01/25/2018 - 07:15 Permalink

Lagarde is one ugly dude. Those 1000 dollar scarfs ze wears are ridiculous. Ze should fuck off, nobody cares what his opinion is and the USD rate is none of his business as a Frog.

U4 eee aaa Thu, 01/25/2018 - 07:19 Permalink

You notice how the witch jumped on him with both feet immediately.


There are two policies that strike fear into the heart of central bankers.


deflation and weakening currencies

mendigo Thu, 01/25/2018 - 07:26 Permalink

Kind of fun but suspect its a bluff.

Weak dollar would torpedo demand for us assets. Which wouldnt be so bad but there are vested interedts.

Pandelis Thu, 01/25/2018 - 07:29 Permalink

fock the IMF


isnt Mnuchin entitled to have his private opinion? what are we supposed to be citizens of the IMF? 


the deep state and international organizations are attempting to steal the elections from the amurikans.


america first!  go trump and his goldman team!

Toshie Pandelis Thu, 01/25/2018 - 07:42 Permalink

Be careful what you wish for. 

Americans have enjoyed their lifestyles for decades . Getting the world to accept the elevated value o the dollar against the world.

inflation is coming anyway, the big question is are you ready for it personally .?

In reply to by Pandelis

Pandelis Toshie Thu, 01/25/2018 - 08:00 Permalink

i have full trust in Mnuchin, i am sure he is doing his best for the amurikan people ... his father and grandfather were partners at Goldman Sachs ... the apple does not fall far from the tree ...

see, i am very careful on my wish - i doubt it though, if that wish (or the wish of all amurikans for that matter) has anything to do with what is going to happen

In reply to by Toshie

J J Pettigrew Thu, 01/25/2018 - 07:38 Permalink

OUR Treasury rooting for our currency to weaken (I know the economics) is counter intuitive.

If strong countries have strong currencies, what is he rooting for?

It shows what a effed up condition our nation is in...have to weaken the currency, mismeasure inflation to keep rates down, all to bailout the largest borrowers and propel the stock market.

BlueHorseShoeLovesDT Thu, 01/25/2018 - 08:00 Permalink

Jesus LeGarde is stupid, the tax cuts, and the resulting deficit increases WILL NOT cause the dollar to rise.

I think Treasury Secretary Mucus knows this, which is why ghe is embracing a weak dollar. Might as well.


I am pretty sure LeGarde is the Davos bicycle.

Atlas Crapped Thu, 01/25/2018 - 08:00 Permalink

A brilliant synopsis of the world view of generational wealth and its global banking interests, always balancing the driving force of self preservation (and elevation) against global cooperation. Let us not forget that a smooth running global economic engine creates more wealth for the ruling classes than a school yard full of territorial bullies.

The families are quite weary of dollar imbalance. Mnuchin talks too much and Ross has to balance him, but they are in full agreement ever since Ross (and the Roths) chose Trump in the 80s for his future role. Ross has already told Mnuchin that we want a weaker dollar, we just don't want to act like we want it - it has to be seen to do this of its own accord in the parlance of global forces that no one can shape. Markets must appear objective.

All according to design. A design that must appear mostly random.

MuffDiver69 Thu, 01/25/2018 - 08:31 Permalink

The dollar and treasuries are liquid to a point and we are not near the point it’s concerning...During transistion President said dollar was too strong and the only people worried about this are our competitors when the economy starts sucking money in from abroad.