What Fed Policy Does to the Dollar

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Treasury secretaries usually extol the virtues of a strong dollar - but not this time.

When you think of a Treasury secretary's usual approach to currencies, you can probably recall any number of instances where a Treasury chief talks about dollar strength.

Now comes Lawrence Summers, a former Treasury secretary, singing a different tune.

"The right thing to do is to focus on the fundamentals of the economy, and if we get the fundamentals right over time, exchange rates will fluctuate but they will be all right as well," he told CNBC. "The Federal Reserve is right to be making judgements in the context of the overall economy and they're right to have a concern about the slowing of the economy."

As for specific Fed policies, Summers is coy.

"Old habits die hard," he says. "Respecting the independence of the Federal Reserve - you're not going to get me to make a comment evaluating those measures one way or the other." In general, though, he says, "the judgement that monetary policy ought to be oriented to domestic growth is the right approach."

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