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Recently, the Federal Reserve Bank of the United States (Fed) aggressively printed money in response to the impact of the epidemic, which led to a sharp depreciation of the US dollar. However, according to the latest report from The Wall Street Journal, Janet Yellen, who will take over as Secretary of the Treasury, will not allow the dollar to depreciate, but instead will return the exchange rate to the market mechanism. The dollar exchange rate is expected to stop falling and stabilize.
The Wall Street Journal reported on the 17th that former Fed Chairman Yellen, who was appointed by future President Joe Biden to be the new Secretary of the Treasury on the 19th, will attend the Senate Finance Committee hearing to confirm the nomination of the Secretary of the Treasury. According to people familiar with the matter, Yellen will make clear at the hearing that the United States will not seek a devaluation of the dollar to stimulate exports, which means that it will no longer continue the policy of devaluation of the dollar during the Trump administration.
The official responsible for the briefing stated that when members of Congress asked about the new administration’s policy on the US dollar, Yellen replied: “The market must determine the value of the US dollar and other currencies. The market will adjust the exchange rate. by itself to reflect changes in economic performance, and Promote the adjustment of the global economy. “
Yellen will emphasize that the Biden government is unwilling to keep the exchange rate low to gain an unfair competitive advantage in international trade. The speech mentioned: “The United States will not gain a competitive advantage by devaluing its currency.” “We should oppose such practices in other countries.”
Since the 2016 election, US President Donald Trump has been advocating for an end to the strength of the US dollar, claiming that this has caused US companies to lose their competitive advantage and created a huge trade deficit between states. States and other countries.
According to data from the Intercontinental Exchange (ICE), since March last year, the ICE dollar index (DXY), which tracks the US dollar against a basket of major currencies, has plummeted by roughly 12%. Almost 0% dragged down.
(This article is reprinted with permission from MoneyDJ News; first image source: Flickr / Pictures of Money CC BY 2.0)
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