'Absolutely not': Bessent shuts down report of U.S. currency intervention

• The U.S. dollar index fell 1.3% on Tuesday and has declined more than 10% compared to 12 months ago, reaching its lowest level since 2022
• Bessent reaffirmed the U.S. 'strong dollar policy' but emphasized it means 'setting the right fundamentals' rather than direct market intervention
• The New York Federal Reserve reviewed dollar-to-yen rates with dealers last week, a move typically viewed as a precursor to currency intervention

Summary: Bessent Dismisses Currency Intervention Reports Amid Dollar Weakness

Treasury Secretary Scott Bessent firmly denied reports that the U.S. is planning to intervene in currency markets, stating "absolutely not" in a CNBC interview Wednesday. The denial comes as the U.S. dollar index fell 1.3% on Tuesday to its lowest level since April 2022, now down more than 10% from one year ago.

Key Developments:

• Reuters reported last week that the New York Federal Reserve had reviewed dollar-to-yen rates with dealers, typically viewed as a precursor to intervention
• Bessent maintained the U.S. has a "strong dollar policy" based on sound economic fundamentals rather than direct intervention
• The Treasury Secretary stated that reducing trade deficits should naturally lead to dollar strength over time

Presidential Stance:

President Donald Trump commented Tuesday that the dollar's recent weakness is "great," expressing concern about China and Japan devaluing their currencies. Trump argued such devaluations create unfair competitive advantages, making it "hard to compete."

Market Implications:

The dollar index recovered slightly in midday trading Wednesday following Bessent's comments. Investors continue monitoring for potential Japanese yen intervention as currency volatility persists. The conflicting signals—with Trump welcoming dollar weakness while Bessent emphasizes long-term dollar strength through policy fundamentals—may create ongoing uncertainty in foreign exchange markets.

The situation highlights the administration's focus on trade competitiveness and the delicate balance between maintaining traditional strong dollar rhetoric while pursuing policies that may benefit U.S. exporters through a weaker currency.