Dollar Tumbles After Mnuchin Endorses Weaker Currency, Ross Speaks Of Trade Wars

Caught in a relentless downward spiral which has puzzled many a trader, it wasn't as if the US Dollar needed any help in accelerating its decline, yet that's precisely what happened this morning in Davos when none other than the US Treasury Secretary Steven Mnuchin "broke with tradition" of supporting the US currency, and said that he endorsed the dollar’s decline as a benefit to the U.S. economy.

"Obviously a weaker dollar is good for us as it relates to trade and opportunities,” Mnuchin told reporters on Wednesday at the World Economic Boondoggle in Davos. "But again I think longer term the strength of the dollar is a reflection of the strength of the U.S. economy and the fact that it is and will continue to be the primary currency in terms of the reserve currency."

Well, if China's ambitions are unchallenged, the dollar's reserve currency status may not be primary for long, but we're not there quote yet.

Meanwhile, the dollar tumbled on the news, with the Bloomberg dollar index sliding to its lowest level in three years, extending the recent slide amid investor concern over President Donald Trump’s protectionist agenda and a special counsel investigation stemming from his 2016 campaign.

Mnuchin shocked Davos participants because while it echoed Trump's own doubts over a strong currency, the Treasury Secretary's "mini QE" came as U.S. officials confront the global elite with their "America First" agenda.

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