The dollar is ticking up on Tuesday after tumbling the prior day.
The US dollar index is up by 0.2% at 100.17 as of 8:01 a.m. ET.
On Monday, Bloomberg News obtained Treasury Secretary nominee Steven Mnuchin’s written response to a senator’s question regarding the implications of a hypothetical 25% dollar increase, which stated:
“The strength of the dollar has historically been tied to the strength of the US economy and the faith that investors have in doing business in America. […] From time to time, an excessively strong dollar may have negative short-term implications on the economy.”
The dollar tumbled to 99.93, its weakest level since December 8, on Tuesday after the Bloomberg report.
President Donald Trump previously said that the US dollar is “too strong” in an interview with the Wall Street Journal. “Our companies can’t compete with [Chinese companies] now because our currency is too strong. And it’s killing us,” he said.
Last week, in his confirmation hearing, Mnuchin said about the president’s comments: “I think when the president-elect made a comment on the US currency, it wasn’t meant to be a long-term comment. […] It was meant to be that, perhaps in the short term, the strength in the currency, as a result of free markets and people wanting to invest here, may have had some negative impacts on our ability to trade.” Following further questioning from senators, Mnuchin reiterated that “the long-term strength of the dollar is important.”
For what it’s worth, US companies have been citing the stronger dollar as a factor for weaker profits over the last few quarters.
Separately, Markit manufacturing PMI and existing-home sales will be out at 9:45 a.m. ET and 10 a.m. ET, respectively.
As for the rest of the world, here’s the scoreboard as of 8:22 a.m. ET:
- The British pound is down 0.7% at 1.2450 against the dollar after the UK’s Supreme Court ruled that parliamentary approval is needed to trigger Article 50.
- The euro is little changed at 1.0751 against the dollar after Markit Eurozone PMI came in at 54.3 in January, down from December’s reading of 54.4.
- The Turkish lira is weaker by 0.3% at 3.7665 per dollar after falling by as much as 1.9% earlier in the morning following the central bank’s decision to hold its benchmark interest rate at 8.00%. The bank raised its overnight lending interest rate by 75 basis points to 9.25%.
- The Russian ruble is lower by 0.4% at 59.2405 per dollar, while Brent crude oil, the international benchmark, is up by 0.7% at $55.60 per barrel.
- The Japanese yen is down 0.6% at 113.35 per dollar.
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