LIVE MARKETS-Dollar held back on suspicions Trump wants weak US currency

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DOLLAR HELD BACK ON SUSPICIONS TRUMP WANTS WEAK U.S. CURRENCY

The U.S. dollar has already wiped out gains made on Monday after a trade deal between the United States and China boosted risk sentiment and reduced fears over a U.S. economic downturn.

That may be at least in part due to concerns that U.S. President Donald Trump wants a weaker U.S. currency, which would boost exports.

“The dollar continues to be haunted by ongoing fears that the Trump administration implicitly supports a weaker dollar,” Brown Brothers Harriman forex analysts Win Thin and Elias Haddad said on Wednesday in a report.

U.S. Treasury Secretary Scott Bessent maintains that the U.S. is committed to a strong dollar, though Trump has previously expressed support for a weaker currency.

Stephen Miran, chair of the White House's Council of Economic Advisers, has also argued that the United States could use tariffs and other strategies as negotiation tools to encourage other countries to strengthen their currencies against the greenback.

“There is growing speculation that some trade deals will involve allowing for greater local currency strength, which means a weaker dollar. That theme re-emerged in Taiwan at the start of this month and continues in Korea today,” Brown Brothers Harriman said.

South Korea's deputy finance minister Choi Ji-young met with Assistant Secretary for International Finance at the U.S. Treasury, Robert Kaproth, to discuss the dollar/won market on May 5, a South Korean government official said on Wednesday.

The dollar index =USD was last at 100.78, after reaching a one-month high of 101.97 on Monday. It fell to a three-year low of 97.92 on April 21.

(Karen Brettell)

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