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Investing.com -- U.S. President Donald Trump expressed mixed views on dollar strength Friday, suggesting that while a strong dollar "sounds good" and feels good "psychologically," a weaker currency provides greater economic benefits for American manufacturers and exporters.
"When we have a strong dollar, one thing happens: It sounds good. But you don’t do any tourism. You can’t sell tractors, you can’t sell trucks, you can’t sell anything," Trump told reporters at the White House before departing for Scotland.
The president noted that a strong dollar primarily benefits inflation control, but claimed manufacturers would be the first to benefit from a falling dollar. He specifically mentioned Caterpillar (NYSE:CAT), whose shares have risen 16% over the past month.
"Now it doesn’t sound good, but you make a hell of a lot more money with a weaker dollar - not a weak dollar but a weaker dollar - than you do with a strong dollar," Trump said.
The dollar index, which measures the greenback against six major currencies, stabilized Friday after hitting two-week lows earlier in the week. The index has fallen approximately 10% during the six months of Trump’s presidency.
Trump pointed to Japan and China as examples of countries that "fought for weaker currencies for decades" which allowed them to "dominate markets over the years."
Despite advocating for the economic advantages of a weaker dollar, Trump acknowledged the psychological appeal of dollar strength, concluding, "I love strong dollars."
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