The greenback has touched the lowest level against major global currencies since 2015. This comes after the US treasury secretary announced that Washington favors a weak dollar in trade.
Addressing the World Economic Forum in Davos, Switzerland, Steven Mnuchin said that a weaker dollar “is good for us as it relates to trade and opportunities.”
The ICE US Dollar Index, which measures the American currency against a basket of six rival currencies, dropped 1 percent to 89.245 on his speech, falling below 90 for the first time since December 2014.
Mnuchin added, however, that “in the long term, the strength of the dollar is a reflection of the strength of the US economy and is and continues to be the primary currency, in terms of the reserve currency.”
“Bears reacted immediately, sending the already out-of-balance currency to the south. The USD is going through a very vulnerable period, in vain trying to find excuses for recovery. And under such conditions, such statements made a particularly painful impact on the currency,” Mikhail Mashchenko, an analyst at the social network for investors eToro in Russia and CIS said in an email to RT.
Gold touched the highest level in at least 52 weeks, trading at $1,368 per troy ounce, buoyed by the weak dollar.
US President Donald Trump is also attending Davos to stress his ‘America First’ policies, White House officials said. Trump has made no secret of the fact that his administration prefers a weaker US dollar to boost trade.