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US President Donald Trump has accused the EU and China of keeping the value of their currency artificially low in order to gain benefits in international trade. "China, the EU and other countries are handling their currencies and their interest rates down" as the US dollar rate continues to rise, Trump wrote on Twitter . This would deprive the United States of its "great competitive advantage". A weak national currency usually makes business easier for domestic exporters as they can sell their products cheaply abroad.
Trump's words sparked restless financial markets. The dollar fell sharply as investors feared a race for devaluation. The German advanced index fell 1.3 percent.
Trump warns against strong US dollars
Earlier, Trump had already made a splash with a TV interview. He also blamed the US Federal Reserve for depriving the US of its "big competitive advantage." The United States has raised interest rates and the dollar "has become stronger every day," he lamented. The Fed has slightly increased its US interest rate twice this year
In the TV interview, Trump also reiterated that it would impose new tariffs on all imports in the trade dispute with China. Commenting on the trade deficit with China, the president said: "The United States is lagging behind." He was "ready to go to 500". Last year, Chinese exports to the United States exceeded 500 billion dollars.
Asked about the possibility that stock markets might yield to such mbadive measures, Trump said: "If they do, they do it."
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