Treasury Secretary Steven Mnuchin says the Trump administration’s goal is a stable US dollar, while, separately, he notes that some foam is seeping into the stock market that has risen from its coronavirus lows to end of march.
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“Clearly there are some individual stocks, I’m not going to mention their names, where ratings are a question.”
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Speaking on CNBC Thursday morning, answering questions about the recent weak dollar trend, Mnuchin pointed to the almost relentless rise in benchmark stock indices, even as the economy continues to falter due to the COVID-19 pandemic. The Nasdaq COMP Composite Index,
has seen 48 consecutive business days with no consecutive losses.
The Nasdaq has risen more than 56% from its March 23 low as a result of protests in the shares of companies such as Tesla Inc. TSLA,
Apple AAPL,
Microsoft MSFT,
Amazon.com, Netflix and Google parent Alphabet GOOGL,
GOOG,
The S&P 500 Index and the Dow Jones Industrial Average DJIA,
both have increased by at least 45%.
“We want a stable dollar,” says Mnuchin. “The dollar reflects a large amount of money going back to the United States … it is the world’s reserve currency and we are going to protect that,” he said.
The dollar has declined by more than 5% against a basket of six other major currencies in the past three months, as measured by the DXY index of the US dollar ICE,
which is heavily weighted against the EURUSD euro,
Mnuchin’s comments come as Senate Republicans reached an agreement with the White House to provide additional taxes for individuals and businesses still suffering from measures to reduce the spread of the pandemic.
The Republican Senate proposal of about $ 1 trillion in funding will serve as the basis for negotiations with Democrats, as weekly $ 600 unemployment assistance is due at the end of the month.
Mnuchin told CNBC that the Republican coronavirus relief plan will extend the improved unemployment insurance “based on a wage replacement of about 70%.” He also said there would be no payroll tax cut in the Republican Senate bill.
Read: Falling US Dollar Could Occur at ‘Warp Speed’ in Coronavirus Era, Warns Leading Economist Stephen Roach
Also read: US dollar is being hit in the mouth, and its forecast amid the coronavirus does not look very good, some experts say
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