Trump says Mnuchin's comments on the dollar were 'taken out of context'

  • President Donald Trump on Thursday said Treasury Secretary Steve Mnuchin's remarks on the dollar were "taken out of context."
  • On Wednesday, Mnuchin said a weaker dollar was good for US trade
  • Trump told CNBC: "The dollar is going to get stronger and stronger, and ultimately I want to see a strong dollar."


President Donald Trump said Thursday that earlier comments by Treasury Secretary Steven Mnuchin on the dollar were "taken out of context."

On Wednesday, Mnuchin told reporters at the World Economic Forum in Davos that a weaker dollar is good for the US "as it relates to trade and opportunities." His comments triggered the dollar's worst sell-off in 10 months.

"Our country is becoming so economically strong ... that the dollar is going to get stronger and stronger, Trump told CNBC. "And ultimately, I want to see a strong dollar."

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Steven Mnuchin, President-elect Trump's nominee for Treasury secretary, testifies during his Senate Finance Committee confirmation hearing in Dirksen Building, January 19, 2017.

(Photo By Tom Williams/CQ Roll Call)

Treasury Secretary nominee Steven Mnuchin sits with Vanessa Trump (R), wife of Donald Trump Jr, before a swearing-in ceremony for senior staff at the White House in Washington, DC January 22, 2017.

(REUTERS/Carlos Barria)

Incoming Trump administration Treasury Secretary nominee Steven Mnuchin departs after working a simulated crisis scenario during transition meetings at the Eisenhower Executive Office Building at the White House in Washington, U.S. January 13, 2017.

(REUTERS/Jonathan Ernst)

Producer Steve Bing (L) and Honoree Steven Mnuchin recipient of the Philanthropic Leadership Award attend The Kaleidoscope Ball - Designing The Future benefitting the UCLA Children's Discovery and Innovation Institute at Mattel Children's Hospital UCLA at Beverly Hills Hotel on April 17, 2013 in Beverly Hills, California.

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Steven Mnuchin, Treasury secretary nominee for U.S. President Donald Trump, right, attends a swearing in ceremony of White House senior staff in the East Room of the White House in Washington, D.C., U.S., on Sunday, Jan. 22, 2017. Trump today mocked protesters who gathered for large demonstrations across the U.S. and the world on Saturday to signal discontent with his leadership, but later offered a more conciliatory tone, saying he recognized such marches as a hallmark of our democracy.

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 Steve Mnuchin and Lousie Linton arrive at the Premiere of Warner Bros. Pictures' 'Jupiter Ascending' at TCL Chinese Theatre on February 2, 2015 in Hollywood, California.

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Heather Mnuchin and Steve Mnuchin attend The Art Show Gala to Benefit The Henry Street Settlement at The Seventh Regiment Armory on February 23, 2005 in New York City.

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Treasury Secretary nominee Steven Mnuchin attends the inaugural parade of U.S. President Donald Trump in Washington, January 20, 2017. Donald Trump was sworn in earlier as the 45th President of the United States.

(REUTERS/Lucas Jackson)

Donald Trumps' Treasury Secretary Steven Mnuchin arrives on the West Front of the U.S. Capitol on January 20, 2017 in Washington, DC. In today's inauguration ceremony Donald J. Trump becomes the 45th president of the United States.

(Photo by Win McNamee/Getty Images)

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A weaker dollar cheapens American products for foreign buyers, which makes US exports more attractive. But it could also erode the US's purchasing power. 

The dollar index, which tracks it against a basket of other major currencies, spiked following Trump's comments and reversed its earlier losses to as high as 89.23. 

The index fell deeper into a three-year low Thursday after Mnuchin's comments. Greg Valliere, the chief strategist at Horizon Investments described the comments as "the first serious economic misstep by the Trump administration."

Mnuchin's comments spooked some investors because it's unusual for an administration to actively favor a weaker dollar, and some saw the White House weaponizing the currency in its trade policy.

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