Yellen says market should determine exchange rates

Treasury Secretary Janet Yellen spoke from a new conference Brazil, where she is attending a meeting with central bankers and finance ministers from Group of 20 nations.

Yellen was answering questions re Trump’s comments in a Bloomberg interview on a “big currency problem” with the dollar.

• Trump said he hears from manufacturers that “nobody wants to buy our product because it’s too expensive”
• and that other countries try to keep their currencies “weak all the time”

Yellen reiterated that the US is in agreement with Group of Seven nations backing market-set FX rates. FX interventions should only take place in situations of excess volatility, and in consultation with partners. (Thats a really ‘in a nutshell’ view, its all about extreme departure from ‘fundamentals, excess speculation and such).

More from Yellen:

• “Over the last several years, the United States has had tight monetary policy,”
• “That’s induced capital inflows that have strengthened the dollar — that’s really something to be expected”
• “We believe that’s how the system should work.”

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On what I said about Japan above, that’s my take, maybe she was giving Suzuki the side-eye, I don’t know.

This article was written by Eamonn Sheridan at www.forexlive.com.