The US dollar slumped against all other major currencies today following the remarks from US Treasury Secretary Steven Mnuchin, who talked about benefits of weaker currency.
Mnuchin said in Davos today:
Obviously a weaker dollar is good for us as it relates to trade and opportunities.
Many analysts pointed out that such comments oppose the policy of strong currency that the United States had for years, even decades.
Also weakening the greenback was the fact that the Federal Reserve is no longer the only central bank of a developed nation that plans to tighten its monetary policy. Traders wait for the European Central Bank to start normalizing the currently extremely accommodative policy relatively soon, while such banks as the Bank of England and the Bank of Canada have already performed interest rate hikes in the recent past.
Adding to the woes of the US currency was economic data released in the USA over the current trading session. With the fall of existing home sales and the unexpected slowdown of the service sector growth, the manufacturing index was the only positive indicator released on Wednesday.
EUR/USD jumped from 1.2298 to 1.2400 as of 21:30 GMT today. GBP/USD jumped 1.5% to 1.3997 to 1.4213. USD/JPY slumped 1% from 110.29 to 109.18.
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