Strong Dollar vs. Weak Dollar

By Patricia CohenI’m the global economics correspondent.President Trump is of two minds when it comes to America’s currency.He wants a strong dollar — one that is worth more compared with other currencies — because he likes its status as the world’s go-to currency for trade and transactions.On the other hand, he also wants a weak dollar — one that is worth less in comparison — because that makes American goods cheaper to buy abroad, which could boost manufacturing at home.Many things affect the strength of a currency, such as how much the economy is growing.

But a president can also steer the dollar’s value more directly.He could drive up the value of a foreign currency by ordering the Treasury Department to buy more of it, for instance.

Or he could pressure other nations to revalue their own currencies or buy more American goods by threatening to impose tariffs on their imports.Both Trump’s goals, a strong dollar and a weak dollar, have benefits.But he can’t achieve both at the same time.

In today’s newsletter, I’ll explain the drawbacks and rewards of each approach.Weakening dollarThe United States buys much more stuff than it sells — $78 billion more, as of November.Trump wants to erase that trade deficit.

The hope is that by getting other countries to buy more American products, they’ll juice American manufacturing and create jobs.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe....