May 14, 2020 / 5:48 PM / 13 days ago

Trump pivots to embrace a strong U.S. dollar

NEW YORK (Reuters) - President Donald Trump may be warming to a strong dollar after years of bashing the U.S. currency’s stubborn appreciation.

FILE PHOTO: A U.S. Dollar note is seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration

“It’s a great time to have a strong dollar ... Everybody wants to be in the dollar because we kept it strong. I kept it strong,” Trump said in an interview with Fox Business News.

The comments contrast with remarks during his presidency in which he has railed against the dollar’s strength. A strong currency makes U.S. exports less competitive abroad and hurts corporations that need to convert their foreign earnings into dollars.

(Graphic: Trump and the U.S. dollar link: here)

Traders have increasingly shrugged off those comments, and the dollar has risen about 3% against a basket of its peers since the 2016 presidential election, stoked by the relative outperformance of the U.S. economy to those in Europe and Asia.

Those gains have been accelerated by recent safe-haven demand amid turbulence in financial markets due to the coronavirus outbreak.

Either “Trump was shooting from the hip, or has realized that he cannot weaken the dollar, so he is embracing it,” said John Doyle, vice president of dealing and trading, at Tempus Inc in Washington.

Ultimately, analysts see Trump’s words on the dollar having little long-term impact on the greenback.

“Trumps comments today will in no way change how I trade currency or effect my forecasts,” Doyle said.

Reporting by Saqib Iqbal Ahmed; Editing by Ira Iosebshvili and Paul Simao

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