Bessent Touts a Strong Dollar After Trump Brushed Off Its Drop

ogx5]brw[q3ke8)dq]3li0m9_media_dl_1.png Bloomberg

Article content

(Bloomberg) — Treasury Secretary Scott Bessent touted a strong-dollar policy on Wednesday, offering the greenback support a day after comments by President Donald Trump had sent the US currency tumbling.

Article content

“The US always has a strong dollar policy,” Bessent said in an interview on CNBC. “But a strong dollar policy means setting the right fundamentals,” he said. “If we have sound policies, the money will flow in.”

Article content

Article content

Article content

Bessent also said the US is “absolutely not” intervening in the currency market to sell the dollar against the yen. Asked whether the US might take such a step, he said that “we don’t comment other than to say we have a strong dollar policy.”

Article content

Article content

His comments sparked a broad rebound in the dollar early Wednesday. It had tumbled 1.1% the previous day after Trump said he was comfortable with the currency’s decline. Asked whether he was worried about it, Trump told reporters, “‘No, I think it’s great.” 

Article content

“Bessent seems to be making an attempt to calm frayed market nerves,” said Sonja Marten, head of FX and monetary policy at DZ Bank. “While the US may welcome a softer dollar in general, a rapid depreciation of the currency is clearly not in their interest either.”

Article content

Speculation that the US might join Japan’s government in selling the dollar against the yen surged on Friday, after so-called rate checks into the currency pair by the Federal Reserve Bank of New York — which serves as the Treasury’s agent.

Article content

Japan’s currency has been tumbling since October, sliding near its weakest level versus the greenback since 1986 earlier this month. The decline has come alongside investor concerns about Prime Minister Sanae Takaichi’s embrace of large-scale fiscal stimulus despite her nation’s elevated debt burden.

Article content

Article content

Japanese authorities have repeatedly warned that they’re prepared to take action to address the yen’s slide. 

Article content

“We’ll continue to take appropriate responses on currency moves while closely coordinating with US authorities as needed,” Finance Minister Satsuki Katayama told reporters late Tuesday.

Article content

Pat Locke, a foreign-exchange strategist at JPMorgan Chase & Co., said that “Bessent’s comments on non-intervention doesn’t take additional jawboning or even intervention off the table, though he reiterated a core position that setting the right fundamentals is key for FX over the long term – not just for the US, but including Japan broadly.”

Article content

Bessent also said Wednesday that the shrinking US trade deficit should automatically lead to more dollar strength over time.

Article content

“I think that with President Trump, with the One Big Beautiful Bill, with our regulatory policies, we are making this the best place to come build your business, have tax certainty, regulatory certainty, energy certainty,” Bessent said.

Article content