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How a 'currency war' could weaken US economy, explained

Updated : August 07, 2019 02:03 PM IST

The Treasury Department maintains what it calls an Exchange Stabilization Fund. It could use this fund to sell dollars and buy yuan, thereby reducing the dollar's value against the Chinese currency.
Taking such steps would violate the international agreements that the United States has signed not to manipulate the dollar's value to gain trade advantages.
Trump also wants the Federal Reserve to cut short-term interest rates repeatedly and aggressively. Doing so would make the dollar less valuable for investors to hold.
How a 'currency war' could weaken US economy, explained

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