This changed at the beginning of the year when Treasury Secretary Steven Mnuchin suggested that a weaker U.S. dollar might be helpful, and this afternoon President Trump added his two cents worth, calling out the ECB and People's Bank of China for currency manipulation, saying that the strength of the United States dollar was hurting the USA economy.
In excerpts of the interview released yesterda, y Trump had broken with the long-established executive branch practice of not commenting on the Federal Reserve's decisions out of respect for its independence.
The outbursts were another crosswind for Wall Street, which struggled to find direction and finished the day a hair's breadth in negative territory.
China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S.is raising rates while the dollars gets stronger and stronger with each passing day - taking away our big competitive edge. It surprised markets when he specifically commented on the Dollar's strength and a potential interest rate hike by the Federal Reserve Bank.
America's central bank has twice increased benchmark lending rates this year, following three raises last year.
The chance inflation might accelerate has increased after the massive tax cut Trump championed past year, which has raised the U.S. debt and budget deficit.
THE ongoing US-China trade tension may disturb the typical summer lull, while disappointing Chinese activity data (Monday) should remind investors that the current trade dispute is occurring when the Chinese economy is already slowing.
Chinese imports from the USA totalled $US205 billion ($276.1 billion) in the first five months of 2018, with the deficit reaching $US152 billion ($204.7 billion).
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Another poll, by Axios , showed Republican support for Trump's handling of his press conference with Putin at a whopping 79 percent.
This comes after the White House proposed placing additional tariffs on Chinese goods, because the country imposed $34 billion worth of retaliatory tariffs on the U.S.
On Friday morning, Trump for a second day also criticized the Federal Reserve, breaking with a long-standing tradition at the White House of avoiding any influence, real or perceived, on the independence of the USA central bank.
Mr Trump has voiced his opinions on trade with China since before his election, and on the campaign trail promised to label Beijing a currency manipulator within the first 100 days of his presidency - a pledge he has not yet fulfilled.
The growing share of worldwide trade under threat - including the tariffs on autos and auto parts now under consideration - could harm the global economy by disrupting manufacturing supply chains, raising prices and causing firms to hold off on new investments. "I guess that has taken people a bit by surprise", he said. "In China their currency is dropping like a rock and our currency is going up, and I have to tell you it puts us at a disadvantage".
The comments sent the dollar tumbling late on Thursday, although by Friday it was the yuan's turn to take a deep hit, trading at a one-year low of 6.7671 per dollar.
A weaker yuan against the U.S. dollar can in theory help Chinese exports to the USA, because Chinese products will be more competitive in price in the United States market. In this sense, instead of fighting a trade war on two major fronts with both China and EU, Trump ought to consider the possibility of making economic peace with China on the win-win model and thus challenge the EU to what ultimately would be a healthy competition to see who is the most willing and able to cut a deal with China which reflects the modern trends of geo-economic openness, cooperation and mutually beneficial results.
"Chinese authorities will likely prevent the currency from moving too sharply in any direction", said Hannah Anderson, global market strategist at JPMorgan Asset Management.