WASHINGTON – Janet Yellen must affirm the US commitment to market-determined exchange rates when it testifies on Capitol Hill on Tuesday, and she will make it clear that the US is not seeking a weaker dollar to gain a competitive advantage, according to Biden transition familiar with his hearing preparation.
The comments would represent a return to the U.S. interventionless approach to the dollar, which President Trump deviated from when he publicly asked for a lower dollar.
Ms. Yellen, the former chairman of the Federal Reserve, is due to appear on the Senate Finance Committee on Tuesday as it considers her appointment to be the next US Treasury secretary, succeeding Steven Mnuchin.
If asked about the new government’s policy toward the dollar, officials responsible for informing Ms. Yellen said she is prepared to say, “The value of the US dollar and other currencies must be determined by the markets. Markets adjust to reflect changes in economic performance and generally facilitate adjustments in the global economy. “
Ms. Yellen must also say that the intentional exchange rate target to gain an unfair advantage in trade is unacceptable.