Mnuchin: The US can get back to 3 percent growth

Cheryl Sanders
February 24, 2017

New U.S. Treasury Secretary Steven Mnuchin took the edge off that optimism overnight when he said any policy steps by the Trump administration would probably have only a limited impact this year.

Mnuchin said the administration will achieve this through a combination of tax cuts and regulatory reform to spur economic growth.

Trump has stuck with this conviction, even as data, the International Monetary Fund and the US Treasury Department say that it is false with most experts believing that China is in fact manipulating the yuan up, not down.

"It's going to be focused on middle income tax cuts, simplification and making the business tax competitive with the rest of the world", Mnuchin said in his first interview since being confirmed as US Treasury Secretary last week.

China on Friday described itself as the "grand champion" of economic development and rejected US President Donald Trump's allegation of currency manipulation to gain unfair trade advantages. "We'll go through that process". "We want to get this done by the August recess".

But Mnuchin told CNBC on Thursday that the administration and Republican leaders in Congress have already agreed on "the majority of where we are on tax reform".

He said his team was still "looking at" the subject of a border adjustment tax that would put a tariff on imports. Mnuchin said that the strength of the dollar has to do with where the USA economy is relative to the rest of the world's.

For wealthy households, Mnuchin said the tax cuts being "offset with reductions of deductions and other things".

The euro strengthened against the greenback as fears that far-right presidential candidate Marine Le Pen might prevail in the coming French election receded, according to market strategists from Scotiabank.

The economic calendar is light for the rest of the day, with markets focusing only on Canadian inflation data and USA new home sales.

"The market these days listens less to Fed words and is more interested in Fed action", Borthwick said.

The PBoC set the yuan's mid-point rate at 6.8743 per US dollar, down 0.4 per cent or 287 basis points from the previous fixing.

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