Biden, Yellen not planning to weaponize US dollar for trade power
Janet Yellen: We will build our economy back better than before
Former Federal Reserve Chair Janet Yellen speaks after being nominated by President-elect Biden for Treasury Secretary.
President-Elect Joe Biden’s administration is set to take a more hands-off approach to the value of the U.S. dollar than that of his outgoing predecessor, President Trump.
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“The value of the U.S. dollar and other currencies should be determined by markets,” said Treasury Secretary nominee Janet Yellen at her Senate confirmation hearing on Tuesday. “Markets adjust to reflect variations in economic performance and generally facilitate adjustments in the global economy.”
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Yellen, the former Federal Reserve chair, is trying to “avoid getting caught in this mantra of a strong dollar is in the US's interest,” said Alan Ruskin, global head of G-10 currency strategy at Deutsche Bank.
|UUP||INVESCO DB US DOLLAR INDEX BULLISH FUND – USD ACC||24.41||-0.07||-0.29%|
Yellen wants to “avoid getting into the potential trap” of talking up the dollar only to see it weaken and then having to answer questions about what she plans to do about it, he added, noting she also doesn’t want the US to “use the exchange rate for competitiveness.”
Both of those ideas are consistent with the messaging within the G-20 group where the U.S. tells other countries to let market forces determine the exchange rate and to not use their currency for trade manipulation.
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