The Trump Team's Evolving Currency-Market Rhetoric: A Timeline

Donald Trump continues to be perhaps the biggest single influence over the dollar, more than three months after his shock election victory.

While policy pledges drove the greenback’s 3.9 percent gain in November, its best rally in more than two years, pronouncements on the currency, and its peers, from him and his administration have whiplashed traders over the past six weeks.

Treasury Secretary Steven Mnuchin has also helped muddy the waters at times, either on his own or in combination with his boss. Mnuchin injected an element of calm Thursday, signaling the administration won’t rush to label China a currency manipulator. Trump’s own take a few hours later -- reading from his campaign-trail rhetorical playbook -- was less nuanced.

“It’s unusual in the U.S. for the president to talk as much about the currency as this president has chosen to, usually they leave that to the Treasury Secretary,” said Sean Keane, an Auckland-based analyst at Triple T Consulting and the former head of Asia-Pacific rates trading at Credit Suisse Group AG. “There’s also an unusual level of confusion generated because Trump seems to feel free to say whatever he wants, while leaving the actual policy execution to his appointees. The outcome is that the president can take the credit for a good outcome, whilst others take the blame if things go wrong.”

Certainly the president and the U.S. currency are more in the news now than they were under Trump’s predecessor.

The following is a compilation of remarks from President Donald Trump and his officials regarding currencies:

• Earlier same day said need to do something about China trade deficit

• Says he’s had “very good conversations” with his Chinese counterparts
• Dollar fell earlier same day when Mnuchin told Fox Business that fiscal
  stimulus effects on the economy this year may be limited.

• Reiterated that strong dollar is a good thing in longer term -- a “reflection of the confidence” people have in the U.S. economy

• Mnuchin held calls with officials including People’s Bank of China Governor Zhou Xiaochuan, Finance Minister Xiao Jie
• Underscored that he looked forward to fostering strong U.S.-China engagement; emphasized importance of achieving a more balanced bilateral economic relationship

• “As far as the currency devaluations, I have been complaining about that for a very long time,” Trump said, didn’t detail how it could be achieved
• Later says he and Abe: “have a very, very good bond -- very, very good chemistry. I’ll let you know if it changes, but I don’t think it will.”

• China and Japan “play the money market” and “we sit there like a bunch of dummies”
• Dollar dropped after comments
• Earlier same day FT reported Trump adviser Peter Navarro as saying Germany using a “grossly undervalued” euro

• While strength can reflect faith in economy, “from time to time, an excessively strong dollar may have negative short-term implications on the economy”
• Noted greenback currently “very, very strong”
• Mnuchin also reiterated intention to review “the issue of Chinese currency manipulation”

• Dollar’s “long-term strength -- over long periods of time -- is important”
• Greenback currently “very, very strong, and what you see is people from all over the world wanting to invest in the U.S. currency”
• Mnuchin said “I would” when asked by Senator Robert Casey on Thursday whether he would recommend naming China a manipulator

• Mexico’s peso sank to record low and Canada’s dollar posted biggest slide since June after Ross signaled new talks with those countries will begin quickly
• Ross also called China the “most protectionist” major country

• Trump said part of problem is because China holds down its currency
• “Our companies can’t compete with them now because our currency is too strong. And it’s killing us”
• Yuan is “dropping like a rock”; recent Chinese actions to support the currency were done simply “because they don’t want us to get angry.”