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The US currency rebounded on Wednesday morning after US Treasury secretary Scott Bessent said the Trump administration was still pursuing a “strong dollar policy” and was not seeking to intervene to boost the Japanese yen.
The dollar jumped 0.8 per cent against the euro and 1 per cent against the yen after Bessent said in an interview with CNBC that he expected the US currency to appreciate.
“The US always has a strong dollar policy, but a strong dollar policy means setting the right fundamentals,” Bessent said, adding that the administration’s policies were making the US “the best place to come”.
“If we have sound policies, the money will flow in and we are bringing down our trade deficit, so automatically that should lead to more dollar strength over time,” Bessent said.
The remarks come after US President Donald Trump said on Tuesday evening that the recent fall in the US currency was a “great” development, pushing the dollar to its lowest level in four years against a basket of peers.
The dollar has fallen almost 2 per cent this year amid speculation that the US Treasury was considering intervention in foreign exchange markets after it emerged that the New York Federal Reserve had conducted a rate check on the dollar-yen exchange rate on behalf of the administration on Friday.
Rate checks are often seen as a precursor to foreign exchange intervention.
Asked if the US Treasury was intervening in foreign exchange markets to prop up currencies against the dollar, Bessent replied “absolutely not”.
When asked if intervention was coming, he added: “We don’t comment, other than to say we have a strong dollar policy.”
This is a developing story