US Treasury Secretary Mr Paul O'Neill has tried to stamp out market speculation that the administration is backing away from its strong-dollar policy.
|
|
US Treasury Secretary Mr Paul O'Neill
|
Mr O'Neill used a television interview to quash the rumours and to offer hope for a US economic recovery.
Markets had been speculating that he would use his appearance on CNBC to change policy.
Mr O'Neill's comments came at a particularly sensitive time for the US economy. On Tuesday, the International Monetary Fund warned the unsustainability of the US current account deficit raised the risk of a sharp dollar depreciation.
The dollar weakened significantly on the report, falling to five-month lows against the euro and Swiss franc. It also fell against the Japanese currency to below the psychologically important 120-yen level.
With that in mind, Mr O'Neill did his best to point to encouraging economic signals.
"I think that we've now put behind us seven months' worth of a correction process, with inventories going down, and I think we're now on the threshold of improvement," he said.
PA