A weak dollar is in line with the Trump administration's protectionist trade policy.
Asked about the comments on the dollar by Trump and Mnuchin, Japanese Finance Minister Taro Aso said on Friday that major economies have agreed to avoid targeting currencies for the objective of trade competitiveness.
During his campaign, Mr. Trump often accused other countries, especially China, of manipulating their currencies to make their exports more globally competitive. The U.S. dollar index is now back to late-2014 levels, but it continues to higher than it was during the period following the financial crisis, when it stayed in a relatively narrow range between 2009 and 2014.
But, it's still stunning to see and hear someone like Treasury Secretary Steven Mnuchin dump on the U.S. Dollar, proselytizing for the benefits of a weakened Greenback.
Trump's comments managed to push the Dollar Index up Thursday afternoon, after sitting at or around a three-year low for a day.
It is taboo for politicians to talk down their currencies as this rhetoric can shift the markets, triggering a risky race to the bottom by competing world leaders.
That's why some Mnuchin's comments were viewed as such a departure.
Many in the markets think that Mnuchin has effectively ditched any idea of a "strong dollar" policy, which has been the mantra - publicly at least - of most Treasury Secretaries for about 20 years.
Our economy is strong, but not necessarily stronger than other nations', Bloomberg notes. That would change the interest rate dynamics of the past few years, when the U.S. Federal Reserve was the only central bank raising rates.
Mnuchin tried to clarify his remarks on Thursday, saying the United States isn't concerned "where the dollar is in the short term".
Trump's comments were quite different from what Mnuchin told reporters earlier this week.
In the interview with CNBC, Trump also indicated he would consider re-entering the Trans-Pacific Partnership if the massive trade deal could be renegotiated. But his comments have not stopped the currency's decline, which continued slipping against most major peers on Thursday. A stronger dollar can also combat some of the negative effects on inflation, making a generally strengthening currency beneficial. Here we have one of the key reasons why the Trump administration strongly desires a weak U.S. Dollar: so that they can point to a strongly rising U.S. stock market as evidence that their policies are working, and they are delivering an increase in wealth to the American people.