A weaker dollar may be good for U.S. companies, but it’s no friend to many U.S. investors.
Treasury Secretary Steven Mnuchin rekindled concerns at the World Economic Forum in Davos last month that the Trump administration is fixing for a trade war. “Obviously a weaker dollar is good for us as it relates to trade and opportunities,” Mnuchin said.
If there was any doubt what Mnuchin meant, Commerce Secretary Wilbur Ross made it plain by adding that “a trade war has been in place for quite a little while, the difference is the U.S. troops are now coming to the rampart.”
The dollar quickly complied. The Bloomberg Dollar Spot Index, which tracks the performance of the dollar relative to a basket of 10 global currencies, fell 1 percent the day Mnuchin made his comments. It was down an additional 0.3 percent through Thursday even after Mnuchin sought to clarify his remarks and expressed support for a strong dollar.