The Wall Street Journal: In return to hands-off approach, Yellen to say U.S. doesn’t seek weaker dollar

WASHINGTON — Janet Yellen is expected to affirm the U.S.’s commitment to market-determined exchange rates when she testifies on Capitol Hill Tuesday, and she will make clear the U.S. doesn’t seek a weaker dollar for competitive advantage, according to Biden transition officials familiar with her hearing preparation.

The remarks would represent a return to the U.S.’s hands-off approach to the dollar, which President Donald Trump had deviated from by often publicly calling for a lower dollar.

Yellen, the former Federal Reserve chairwoman, is set to appear before the Senate Finance Committee Tuesday as it considers her nomination to be the next U.S. Treasury secretary, succeeding Steven Mnuchin.

If asked about the new administration’s dollar policy, officials responsible for briefing Yellen said she is prepared to say, “The value of the U.S. 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.”

Yellen is also expected to say the intentional targeting of exchange rates to gain an unfair advantage in trade is unacceptable

“The United States doesn’t seek a weaker currency to gain competitive advantage,” she is prepared to say, according to the officials. “We should oppose attempts by other countries to do so.”

An expanded version of this report appears on WSJ.com.

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January 18, 2021 at 02:32PM

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