Commodities: Trump’s Card

Commodity prices were on fire on Thursday morning still soaring after comments by Treasury Secretary Steve Mnuchin that the weak dollar was good for the U.S. economy.European Central Bank President Mario Draghi then weighed in and seemed aghast at the remote possibility that someone in a high governmental position might make a comment to weaken their currencies, so said Mr. I’ll do whatever it takes to save the Euro. The Wall Street Journal said that “While he didn’t refer to Mr. Mnuchin by name, he suggested that recent comments breached an agreement among policymakers not to target exchange rates for competitive purposes. In central-banking terms, that counts as the gloves coming off.” Yet his comments seemed to do little to change the direction of the rising Euro or the falling dollar. That was left to President Donald Trump who laid down the trump card and said that the dollar is going to get stronger and stronger” which caused oil and other surging commodities like metals to erase gains and shake off the Steve Mnuchin dollar talk that was just stating facts. Facts like a weak U.S. dollar is good right now for the U.S. economy and in a round-about way the global economy as we are the country that buys the most stuff. 

Image Source: www.politico.eu

The Washington Times reported that Treasury Secretary Steve Mnuchin was surprised how much attention his comments on the dollar received since it’s a consistent point he’s made for the past year. “I am a bit surprised,” Mr. Mnuchin said on Fox Business. “My comments about the dollar had been completely consistent with what I’ve said over the last year.” He said that the drop in the dollar was “not a concern of mine,” adding that the dollar will strengthen as the economy continues to prosper. “If you look at my full transcript from yesterday, it was incredibly balanced, it was consistent with what I’ve said over the last year, and it wasn’t news,” he added. Tell the oil and gold and copper traders that. After his comments, the dollar had its biggest drop in 10 months causing oil to rise faster than it already was on plunging global oil inventories.