As of last week, the ICE Dollar Index, which tracks the dollar against six major currencies, surged 9.8% from its 2018 low, according to data from the parent company of the New York Stock Exchange, InterContinental Exchange Group (ICE).
Reported that the Trump government whether to intervene in the currency to release a contradictory signal, the market is confused. White House advisers have pointed out that currency intervention is not within consideration, but Trump insists that he has not personally ruled out using it.
Morgan Stanley Bank strategists said last month that as the Federal Reserve continues to ignore Trumps interest-rate cuts, the U.S. governments chances of implementing monetary interventions are increasing.
The report points out that in fact, the United States has only had three experiences of intervening in currencies since 1995, namely, 1998, 2000 and 2011. The common point is that the U.S. Treasury Department, the Federal Reserve and U.S. allies cooperate each time.
Fred Bergstein, director of the Peterson Institute for International Economics, said that any effort to weaken the dollar would have to compete with huge monetary market forces, so the effectiveness of monetary intervention might not be good.
Reported that, on the other hand, insists that the independent Fed is unlikely to support official monetary interventions. At a time when Trump has repeatedly raised political pressure and urged interest rate cuts, if the Federal Reserve cooperates with the government to intervene in the money market on a large scale, it will inevitably have an impact on the credibility of the institution.