Value of U.S. dollar sinks to 3-year low after Mnuchin comments

Jan. 24 (UPI) -- The value of the U.S. dollar fell to a three-year low on Wednesday after Treasury Secretary Steven Mnuchin said a weak dollar has trade advantages.

The dollar has been declining since 2014 but its fall hastened after Mnuchin, speaking at the World Economic Forum in Davos, Switzerland, said, "A weaker dollar is good for trade. In the longer term, a stronger dollar is a reflection of the strength of the U.S. economy."

He added that the dollar's short-term decline is "not a concern of ours at all."

U.S. officials typically refrain from making comments about the relative strength of the dollar, and the government does not directly attempt to set its value, the Wall Street Journal reported.

The ICE U.S. Dollar Index -- which measures its value against the yen, the euro and other foreign currencies -- fell 1 percent on Wednesday to 89.304. The index had not been below 90 since 2014, and the dollar's decline erased the 30 percent gain it made on the index between 2014 and 2016.

The dollar fell one percent against the yen, 0.8 percent against the euro and 1.5 percent against the British pound on Wednesday.

Mnuchin's remarks were similar to those of President Donald Trump, who said a strong dollar prevented exporting U.S. companies from competing with businesses in other countries. Since January, the value of the dollar has fallen 10 percent.

Analysts note that while a weak dollar could help U.S. exports, it devalues all types of U.S. assets like Treasury bonds and makes the cost of goods from overseas more expensive, CNBC reported.