The US Treasury Department is set to release a report later in the week assessing which, if any, foreign governments are manipulating their currencies to the detriment of the United States. Asian stock markets were mostly lower Thursday after Wall Street fell for a second day and U.S. President Donald Trump.
"The comments on China could have been positive (for the yuan) because I felt China was walking on eggshells over this issue and to the extent that when they have intervened over the a year ago it's been to sell dollars to keep (the pair) from moving higher", he said.
FILE - Donald Trump speaks with reporters in the lobby of Trump Tower in NY prior to taking office as president, January 13, 2017.
A currency manipulator label for China could have resulted in tariffs on imported Chinese goods.
Trump also said imposing the manipulator label now could jeopardize his talks with Beijing on confronting the threat of North Korea. Trump continued to refer to China as a currency manipulator as recently as February 2017, telling Reuters, "I think they're grand champions at manipulation of currency".
During Trump's campaign, he repeatedly promised to impose the currency-manipulator label on China on "day one" in office.
"It could also be taken as an implicit threat to other countries that if the dollar stays strong and if US bilateral trade imbalances with its major trading balances stay high or continue to expand, that he will take some sort of action", Prasad said.
On the campaign trail, Trump frequently slammed China for purposefully weakening its currency, the yuan, to make its goods cheaper for customers in other countries. "But going it alone means going it with lots of other nations", he cautioned China, if the latter decided not to help him on the issue of North Korea, which has been carrying out provocative missile tests at frequent interval.
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Trump said he was open to the idea of reappointing Janet Yellen to head the Federal Reserve.
In the interview, Trump also inveighed against the strong USA dollar, saying that the strength of the currency stemmed partially from people's confidence in him, but that it was also hurting the economy.
He added that a strong dollar had benefits, but would ultimately hurt the USA economy. "And you know, it's very rare that he comes and stays with somebody and spends that much time", Trump said.
Gold soared above $1,280 last night, and now it is back to highs last seen around the time of the U.S. election in November.
"They're not currency manipulators", he said. But he has been mostly mum on the topic since the inauguration, and the topic didn't appear to come up when China's president Xi Jinping visited last week. Russian Federation condemned the USA action.
Greg McKenna, chief market strategist at CFD and FX provider, AxiTrader, said, "What's important here, and worth noting for investors and traders, is that President Trump has shown a willingness to change previously strongly held and articulated positions when he has been convinced - or informed - of the reality".
Treasury Secretary Steven Mnuchin, who sat in on part of the interview, said the president was "very close" to filling some the three vacancies on the Fed board.
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