U.S. President Donald Trump’s latest accusation of currency manipulation has foreign-exchange analysts game-planning the administration’s next move.
Trump tweeted Wednesday that Europe and China are playing a “big currency manipulation game,” days after he declared a tariff ceasefire with Chinese leader Xi Jinping. For market observers, the president seemed to suggest going beyond mere jawboning. His call to “MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games” has strategists considering the possibility that the U.S. Treasury could intervene to weaken the dollar.
The U.S. hasn’t intervened in FX markets since 2011, when it stepped in to strengthen the dollar as part of an international effort after the yen soared in the wake of that year’s devastating earthquake in Japan. But with Trump’s repeated complaints about dollar strength — even after the U.S. refrained from formally labeling China a currency manipulator at the end of May — anything is on the table, according to Canadian Imperial Bank of Commerce.