Today the Dollar Lost and Then Gained the Vast Sum of . . . Half a Cent

I don’t want to beat a dead horse, but—oh, who am I kidding? What’s a blog for if not to beat a few dead horses? You’ve probably already heard that Donald Trump said today that the US is actually in favor of a strong dollar policy, thus ending the Mnuchin crisis of a few hours earlier. The whole world breathed a sigh of relief.

However, I’d like to put this in perspective. Here’s what the dollar/euro exchange rate has looked like over the past few days:

Unbelievable, isn’t it? Mnuchin ran his mouth off and the dollar lost…half a cent. Six hours later Trump set things right, and the value of the dollar settled in at 0.8 euros, a rate that was identical to where it was 24 hours before. We really dodged a bullet, didn’t we?

Look, it’s not a great idea for Treasury secretaries to blab about stuff without thinking through the consequences. But the conventional wisdom is positively cultish in the way it insists on nothing but gnomic utterances from the Fed and the Treasury. On Wednesday the dollar dropped 0.6 percent all on its own. It probably would have done the same thing today, but thanks to the mob mentality of currency traders it only took an hour. So what?

Anyway, the dollar is back up temporarily thanks to Trump, but over the next few days it’s going to do whatever it was going to do anyway. Nothing Mnuchin or Trump said made any actual difference, no matter how many columnists insist otherwise. This episode tells us nothing except that currency traders overreact to news like this in hopes of making an ultra-short-term profit. That’s all.

DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate