So No One Cares about a Weak Dollar Anymore?

I'm utterly confused about Washington's comments on the dollar at Davos. Wall Street isn't sure how to take Treasury Secretary Steven Mnuchin's statement that seems so say a weak dollar is great because it makes exports cheaper. And then the dollar plunged again after this, and it usually rises when the economy improves. So is this a new policy and what is it going to mean? When there's so much talk about the consequences of countries depegging from the dollar ... and oil pegged to the dollar ...

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I smell a trade war coming on ... when you openly support your weakened currency and simultaneously impose tariffs you invite a backlash from other countries.

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It'll make foreign goods more expensive here and probably lead to revengeful tariffs on US exports. That, in turn, will hit US manufacturers. It's a vicious circle.

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What effect on oil?

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A stronger dollar gives us more purchasing power and is generally (always been) an indication of economic improvement ...  

 

 

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