US President Donald Trump on Tuesday took a shot at ECB head Mario Draghi, who said Europe may be in line for more stimulus money – a move which would weaken the euro against the dollar.
Currency devaluation, however, is nothing new for the US. Over the past decade, the US Federal Reserve has printed trillions of dollars to buy government bonds and mortgage-backed securities following the 2008 financial crisis.
European Central Bank (ECB) President Mario Draghi said that if things don’t improve with the economy, “additional stimulus will be required,” adding that the central bank could use interest-rate cuts among other things to make its inflation targets, according to Markets Insider.
Following Draghi’s statement, the euro dropped by 0.28 percent to about 1.119 against the dollar.
President Trump promptly tweeted out his disapproval, saying that “Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA.
“They have been getting away with this for years, along with China and others.”
The president has previously gone after other central banks over currency devaluation. In early June, Trump told CNBC’s ‘Squawk Box’ that the US needs to have a “fair playing field” against China’s yuan, which reached lows for the year earlier in the month.
According to CNBC, Trump said the weakening yuan mitigates the impact of US tariffs on Chinese goods.
In May, the US Treasury complained about the “undervalued” euro – a recurring theme within the Trump administration. In 2017, trade adviser Peter Navarro, as cited by Markets Insider, said Germany is “exploiting a ‘grossly undervalued’ euro to boost its exports at the expense of the US and the rest of the Eurozone.”
“We are not currency manipulators,” Draghi said at the time. “Our monetary policies reflect the diverse positions in the economic cycle of the eurozone and the US.”