BENGALURU (REUTERS) – Janet Yellen, President-elect Joe Biden’s pick to take over the US Treasury, is expected to affirm the United States’ commitment to market-determined foreign exchange rates when she testifies on Capitol Hill on Tuesday, the Wall Street Journal reported on Sunday (Jan 17).
The Treasury secretary nominee will make clear at a Senate confirmation hearing that the United States does not seek a weaker dollar, the newspaper reported, citing Biden transition officials familiar with her preparation for the session.
“The value of the US dollar and other currencies should be determined by markets. Markets adjust to reflect variations in economic performance and generally facilitate adjustments in the global economy,” Ms Yellen will say, if asked about the incoming administration’s dollar policy, according to the report.
“The United States doesn’t seek a weaker currency to gain competitive advantage,” she is prepared to say, according to the WSJ. “We should oppose attempts by other countries to do so.”
A Biden transition team official did not respond to a request for comment about Ms Yellen’s testimony. Mr Biden, a Democrat, takes office on Wednesday.
The policy outlined by Ms Yellen would be a return to a traditional posture on the dollar that has been expected in the new administration.
Outgoing Republican President Donald Trump railed against the dollar’s strength for years, saying it gave other countries a competitive advantage over the United States.
Mr Trump’s thinking appeared to shift last year. In May, he said it was “a great time to have a strong dollar. … Everybody wants to be in the dollar because we kept it strong. I kept it strong.”
After hitting a year high last March, the US currency went on to notch its worst annual performance since 2017, weighed down by rock-bottom interest rates that diminished its attractiveness to yield-seeking investors.
Ms Yellen, who served as head of the US Federal Reserve from 2014 to 2018, is expected to win confirmation in the Senate and will likely be one of the first Biden Cabinet picks to be confirmed.