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Twenty-three years of policy out the window? That’s what might have just happened.
After all, government officials have spoken in favor of a strong U.S. dollar since Robert Rubin’s tenure. Democrat or Republican, economic expansion or recession: It’s been the mantra. Or at least it as the mantra until today.
“A weaker dollar is good for us as it relates to trade,” U.S. Treasury Secretary Steven Mnuchin reportedly told the press in Davos, Switzerland. The former hedge-fund manager and Goldman Sachs executive drove the point home further by saying the greenback’s ongoing slide is “not a concern.”
His comments come at a pivotal time in currency markets, just one day before the European Central Bank’s meeting and a week before the Federal Reserve’s interest-rate announcement and key monthly jobs data. There’s also been a growing wave of speculative bets against the U.S. currency in the futures market. (Click here for today’s earlier story citing Commitments of Traders data on Euro contracts.)
This trend is definitely one traders can follow given the huge number of liquid instruments correlated to the U.S. dollar, including Euro futures (@EC on the TradeStation platform), the Dollar index (@DX) or gold (@GC).
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