Donald Trump's comment on 'stronger' U.S. greenback sinks Australian dollar

Donald Trump's comment on 'stronger' U.S. greenback sinks Australian dollar

Donald Trump's comment on 'stronger' U.S. greenback sinks Australian dollar

The dollar index, which measures the traded value of the greenback against a basket of other currencies, including sterling and the euro, hit a three-year low of 88.5.

Speaking to reporters at the World Economic Forum (WEF) annual conference in Davos on Thursday, Mr Mnuchin: "I thought my comment on the dollar was actually quite clear yesterday".

Banking analyst Dick Bove reportedly claims the Trump administration's weak-dollar policy threatens to halt the bull-run stock-market rally raging into record territory since the 2016 election.

The Trump administration's chief spokesman for the USA dollar, Treasury Secretary Steven Mnuchin, has given an extra nudge to an already sliding greenback, shaking up currency markets in the process.

Mnuchin's comments drove further losses in the dollar on Wednesday, which gave the currency its biggest daily percentage drop in seven months.

Steven Mnuchin, United States Secretary of the Treasury, walks through the snow during the annual meeting of the World Economic Forum in Davos, Switzerland, on January 24.

Mnuchin's comments give "a green light to ongoing dollar weakness as far as the market is concerned", said Shahab Jalinoos, global head of foreign-exchange trading strategy at Credit Suisse Group AG in NY. "We still very strongly believe that we have a stable dollar and that's a good thing and that's why it's the reserve currency".

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Another factor that helped gold's upmove was the report that the US President Donald Trump is likely to underline his "America First" policies in his forthcoming speech at the World Economic Forum in Davos on Friday.

"The action is where the medical cannabis export markets are, which are much larger than Canada", Chris Damas, editor of the BCMI Cannabis Report, told Reuters. "You run the risk of not just talking down the dollar but talking people out of buying USA equities and US bonds as well", High Frequency Economics' Jim O'Sullivan told Politico of Mnuchin's comments. Those remarks sparked concerns that America is abandoning its long-standing strong-dollar policy and wants a weaker currency.

The dollar fell to its lowest level since December 2014 following Mnuchin's comments.

"To the extent that trade is disrupted, it's probably not good for economies, for United States companies and corporations, and would probably put pressure on the rising stock market", Michael Cuggino, president and portfolio manager at the Permanent Portfolio Family of Funds in San Francisco, told Bloomberg News.

Trump too has signaled his preference for a softer dollar.

"What's happening in the U.S".

Mnuchin said the U.S.is not seeking to use the currency as a weapon in any trade war but that the USA government will do all it can to bolster US business.

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