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00:00BEEN SOME COMMENTS FROM HIS TREASURY SECRETARY, HIS NOMINEE. DAVID IS LOOKING AT THAT. LET'S START OFF WITH STEVEN MNUCHIN. DAVID: LET'S PUT THIS INTO CONTEXT. THE TREASURY SECRETARY NOMINEE WAS ANSWERING QUESTIONS, WRITTEN ANSWERS TO QUESTIONS FROM SENATORS. THERE WAS ONE QUESTION AS IT RELATED TO THE U.S. DOLLAR. BASICALLY THE QUESTION WAS -- THIS IS A COPY OF THE TRANSCRIPT . ONE OF THE QUESTIONS TALKED ABOUT HOW FORECASTERS SEE THE U.S. DOLLAR APPRECIATING ABOUT 25% TO HELP OFFSET THE COST OF IMPOSSIBLE BORDER TAX. HIS ANSWER WAS THIS -- THE STRENGTH OF THE DOLLAR HAS HISTORICALLY BEEN TIED TO THE STRENGTH OF THE ECONOMY, BUT FROM TIME TO TIME, AND EXCESSIVELY STRONG CURRENCY MAY HAVE A NEGATIVE SHORT-TERM IMPLICATION ON THE ECONOMY. THESE WERE WRITTEN ANSWERS. NO OTHER DETAILS WERE GIVEN ON WHAT IT MEANS TO HAVE AN EXCESSIVELY STRONG CURRENCY, BUT I GUESS, RISH, 25% MOVE UP IN THE DOLLAR AGAINST ANY MAJOR TRADING PARTNERS CURRENCY -- YOU ARE GOING TO SEE AN IMMEDIATE IMPACT IN MANUFACTURING AND A DRYING UP OF INVESTMENT INTO THE U.S., IF IT DOES HAPPEN. 25% IS EXCESSIVE, OBVIOUSLY. RISHAAD: THE THING IS, THE OLD ADAGE THAT A STRONG DOLLAR IS TIED TO A STRONG ECONOMY, HE MAINTAINS THAT. DAVID: WE HAVE SEEN IT HAPPEN. HE WAS POSED ANOTHER QUESTION, THE OTHER PART I WANT TO GET TO. ESSENTIALLY IT WAS, PRESIDENT-ELECT AT THAT TIME DONALD TRUMP COMMENTED THE DOLLAR WAS TOO STRONG. AS U.S. TREASURY SECRETARY, WILL YOU USE PUBLIC STATEMENTS TO INFLUENCE THE VALUE OF THE U.S. DOLLAR? HE DID NOT ANSWER IT DIRECTLY, BUT HE SAID, I WILL MAINTAIN THE POSITION THAT A LONG-TERM STRONG AND DEPENDABLE CURRENCY IS IN THE BEST INTEREST OF THE U.S. ECONOMY. HAVE LOOK AT HISTORICAL DATA. ESSENTIALLY WHAT IT SHOWS YOU IS THAT WHENEVER GROWTH WAS AT THE BEST PHASE FOR THE U.S. ECONOMY, THIS GOING BACK TO 1970, IT CAME AT A TIME WHEN THE DOLLAR WAS STRONG. HE MADE THE ARGUMENT THAT THE ECONOMY IN THE 1970'S AND EARLY 1980'S WAS DIFFERENT THAN TODAY. THAT SAID, IT HAPPENS. HISTORICAL DATA TO SUPPORT THE VIEW THAT YOU CAN HAVE A STRONG U.S. ECONOMY AND A STRONG CURRENCY AT THE SAME TIME. RISHAAD: MANY SEEM TO THINK THAT THE DOLLAR MAY WEAKEN FURTHER SHORT-TERM. WHAT ABOUT DOWN THE ROAD? THERE ARE PEOPLE THINKING THIS IS ESSENTIALLY A REALITY CHECK BECAUSE INTEREST-RATE HIKES PERHAPS ARE LEAVING CURRENCY TRADERS WITH NO CHOICE. DAVID: ABSOLUTELY. WE DON'T REALLY TALK ABOUT THE FED RIGHT NOW. WHAT IS LONGER-TERM FORECASTS ARE ESSENTIALLY SAYING IS YIELD DIFFERENTIALS WILL SUPPORT THE DOLLAR RALLY. HAVE A LOOK AT THIS CHART. TO BLOOMBERG DOLLAR INDEX AND THE SPREAD BETWEEN 10 YEAR TREASURIES AND 10 YEAR WANTS -- BONDS. IT IS OBVIOUS THE RELATIONSHIP IS QUITE CLOSE. HAVE A LOOK AT THE FORECAST FROM CREDIT SUISSE. WHAT THEY ARE SAYING IS THAT WHEN YOU LOOK SHORT-TERM, YOU'RE GOING TO SEE PRESSURE ON THE MEXICAN PESO. THE PESO, 25 TO THE DOLLAR. THEY ARE LOOKING AT SAY THE CHINESE REMEMBER THE, 6.3 IS WHAT THEY'RE CALLING FOR. SHORT-TERM, WE COULD SEE SOME PAIN. LONGER-TERM, THE PIECES SEEM TO SUGGEST IT WOULD BE SUPPORTIVE

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Mnuchin Says Strong Dollar May Hurt U.S. Economy

U.S. Treasury Secretary nominee Steven Mnuchin said an “excessively strong dollar” could have a negative short-term effect on the economy. Bloomberg's David Ingles has more on "Bloomberg Markets." (Source: Bloomberg)

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