Trump hails strong dollar, but doesn’t rule out intervention

President Donald Trump sent more confusing messages to financial markets and trading partners on Friday, hailing the strong US dollar but refusing to rule out using intervention to get a more favorable exchange rate.

That appeared to contradict comments from a top economic advisor just hours earlier who said the White House had ruled out a move to weaken the dollar.

“The dollar is very strong. The country is very strong. The dollar is a beautiful thing in one way but it makes it harder to compete,” Trump told reporters.

But when asked why he had ruled out taking action when it was discussed at a meeting with his economic team on Tuesday, Trump said, “I can do that in two seconds. I didn’t say I’m not going to do something.”

Trump has repeatedly accused countries like China and Germany of taking advantage of weaker currencies to boost exports to the United States but according to a report in Politico on Friday, he smacked down a push by White House trade hardliner Peter Navarro to weaken the dollar to compensate. Larry Kudlow, head of the White House National Economic Council, had told CNBC earlier Friday that despite persistent concerns about actions by other countries to influence their currencies, “we have, as a matter of policy, ruled out currency intervention.”

The fact the White House was even discussing intervention was a bombshell to some economists.

“The administration was seriously considering currency intervention. ... That in itself is extremely concerning,” Gregory Daco of Oxford Economics said on Twitter. “I see this as a key risk over the next 12 months,” he told AFP.