Treasury Secretary Steven Mnuchin said Thursday he spends little time thinking about dollar weakness over the short term, walking back his comments that sent the U.S. currency reeling amid fears of a trade war.
Speaking during a CNBC-moderated panel at the World Economic Forum in Davos, Mnuchin said dollar weakness in the short term was "not a concern of mine," before adding: "In the longer term, we fundamentally believe in the strength of the dollar."
When asked whether his comments on Wednesday reflected a change in traditional U.S. policy, Mnuchin replied: "It is not a shift in my position on the dollar at all. It is perhaps slightly different than previous Treasury secretaries who in recent times have just commented on strong dollar, strong dollar."
The dollar plummeted to three-year lows on Wednesday, its biggest one-day drop in 10 months, after Mnuchin suggested a weak greenback would be good for the U.S.
Mnuchin's comments had echoed statements by President Donald Trump, who helped turn a market trend of a stronger dollar last January when he declared prior to his inauguration that the dollar was "too strong" and that U.S. companies couldn't compete because of it — particularly against the Chinese.
The dollar index has lost more than 10 percent since then, and after Mnuchin's comment Wednesday morning, it sank to the lowest level since December 2014.
When speaking Thursday morning, Mnuchin underlined some of the benefits a weaker dollar could bring to Washington. He told CNBC that while he acknowledged greenback weakness in the short term would create issues for some, it would be "beneficial" for some U.S. trade imbalances.
The comments are widely seen as a departure from the past three presidential administrations and Treasury secretaries — going back to Robert Rubin.
On Thursday morning, the U.S. currency was trading down 0.1 percent against a basket of major currencies at about 89.07.
— CNBC's Patti Domm contributed to this report.