Trump accuses China and EU of manipulating currencies
President also takes swings at Fed rate setters
President Donald Trump accused China and the European Union of manipulating their currencies to try and combat American tariffs, while acknowledging that the US Federal Reserve is the chief cause of the strengthening dollar.
Ahead of trade talks in Washington between US officials and a Chinese delegation, President Trump told Reuters overnight that he believed “China is manipulating their currency” and that the euro had also been tweaked.
Trump believes both sides are undervaluing their currencies to make exports cheaper and more competitive. This could prove an effective move against the recently imposed US sanctions on exports from China and the EU.
It is not the first time the President has railed against the strong dollar and perceived Beijing manipulation, raising the topic during his 2016 presidency campaign but later retracting the comments.
Trump added in the interview that he did not expect much from this week's trade talks and he had “no time frame” in mind to end the trade war.
Last month, both superpowers imposed tariffs affecting trade worth $34bn (£26.5bn). The US is now set to impose a new round of $16bn on Chinese goods that will take effect on Thursday. Beijing is expected to respond with equivalent tariffs.
President Trump also criticised the Federal Reserve once again for raising interest rates for a second time this year. It is expected that the Fed chair Jerome Powell will lead another hike by the start of 2019.
"I'm not thrilled with his raising of interest rates, no. I'm not thrilled," he said.
Neil Wilson, chief market analyst at Markets.com said: “Taken together with previous comments we see a clear pattern of the president willing to talk the USD lower whenever it starts to look a bit toppy. Two ways to look at this: one if done enough times it can exert a powerful influence over market expectations.
“Two, comments like these will produce diminishing returns for the president. I think on this one the market will come round again and the dollar bounce back, but nonetheless it does appear the market is worried that the president will exert influence on Fed policy,” he added.