Treasury Secretary Steven Mnuchin says that a stable U.S. dollar is the goal of the Trump administration, while, separately, noting that some froth was percolating in the stock market that has surged since its coronavirus lows seen in late March.
“ ‘There clearly are some individuals stocks–I’m not going to mention their names–where valuations are a question .’ ”
Speaking on CNBC on Thursday morning, responding to questions about the recent trend of weakness in the dollar, Mnuchin noted the nearly unceasing climb in benchmark stock indexes even as the economy continues to reel from the COVID-19 pandemic. The Nasdaq Composite Index COMP, +0.05% has seen 48 consecutive trading days without back-to-back losses.
The Nasdaq has climbed more than 56% from its March 23 low on the back of rallies in the shares of companies including Tesla Inc. TSLA, +1.40%, Apple AAPL, -0.54%, Microsoft MSFT, -1.21%, Amazon.com, Netflix and Google parent Alphabet GOOGL, -0.00% GOOG, -0.11%. The S&P 500 index and the Dow Jones Industrial Average DJIA, -0.19% have both risen by at least 45% .
“We want a stable dollar,” Mnuchin says. “The dollar reflects lots of money coming back into the United States… it is the reserve currency of the world and we’re going to protect that,” he said.
The dollar has declined by more than 5% against a basket of six major currencies over the past three months, as measured by the U.S. ICE Dollar Index DXY, -0.06%, which is heavily weighted against the euro EURUSD, +0.10%.
Mnuchin’s comments come as Senate Republicans reached a deal with the White House to provide additional fiscal for individuals and businesses still hurting from the measures to curtail the spread of the pandemic.
The Senate Republican proposal for some $1 trillion in funds will serve as a basis for negotiations with Democrats as the $600 weekly unemployment benefit top up assistance expires at the end of the month.
Mnuchin told CNBC that the Republican coronavirus relief plan will extend enhanced unemployment insurance “based on approximately 70% wage replacement.” He also said that there would be no payroll tax cut in the Senate Republican’s proposal.