Trump Accuses Russia, China Of Currency Devaluation: "Not Acceptable"
There is just too much economic confusion in the latest tweet from Trump to even begin to explain it, so we will just point out that moments ago Trump, in this case definitely not under the advice of Larry Kudlow, accused China and Russia of "playing the currency devaluation game", at a time of rising interest rates, which Trump slammed as "not acceptable."
Russia and China are playing the Currency Devaluation game as the U.S. keeps raising interest rates. Not acceptable!
— Donald J. Trump (@realDonaldTrump) April 16, 2018
Without going too deep - as we would never get out - it is worth noting two things: first both currencies have been strengthening until very recently.
Second, that the only reason Russia is "playing the devaluation game" is because of the sanctions Trump unleashed on Russia last week which sent both the ruble, and Russian assets crashing. If anything, Moscow wants a stronger Ruble to avoid having to raise rates even higher. As for China, which it may want a weaker yuan, it will surely come as news to Beijing that it is devaluing the currency, which is trading at the strongest level against the dollar since the August 2015 devaluation, as a result of - drumroll - the weaker dollar. In fact, the weaker the dollar, the stronger the Yuan.
Meanwhile, the biggest irony is what Trump himself told the WSJ exactly one year ago: "I think our dollar is getting too strong, and partially that's my fault because people have confidence in me."
Maybe if Trump wants stronger foreign currencies - i.e. a weaker dollar - he should just make sure people have "less confidence" in him? That, or more likely, he will start attacking Jay Powell in his morning tweets, demanding the Fed stop hiking rates.