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Mario Draghi, president of the European Central Bank (ECB), hit out at US Treasury Secretary Steven Mnuchin who broke with the strong dollar policy of previous administrations when he said a weaker dollar was good for American trade. Mr Mnuchin’s comments reignited speculation the White House wants to devalue the US currency in a bid to boost exports as part of Donald Trump’s “America First” agenda. A stronger euro makes it more difficult for eurozone nations to sell their products and services abroad. Mr Draghi suggested October’s international agreement between economies - including the US - not to talk down their currencies was being broken.

GETTY Mario Draghi and Steven Mnuchin

GETTY Steven Mnuchin has been accused of trying to devalue the dollar at the expense of the euro

The use of language doesn’t reflect the terms of reference we have agreed Mario Draghi

And he said recent exchange rate volatility had been sparked by “the use of language that doesn’t reflect the terms of reference we have agreed”. When asked if the Trump administration was a cause for concern, Mr Draghi said: “Several members of the ECB governing council expressed concern. “The concern was broader than simply the exchange rate, it was about the overall status of international relations right now.” Mr Draghi’s comments are the strongest attack yet from the ECB on the Trump administration since it took office.

GETTY Donald Trump arrives in Davos

In the past, it has warned Washington in more veiled terms of the dangers of trade protectionism. The US dollar has fallen 14.6 percent against the euro since Mr Trump took office a year ago, including a 1.8 percent drop in the two days since Mr Mnuchin’s remarks. The euro rose above $1.25 for the first time since December 2014 on Thursday before slipping to $1.249 in late London trading, up 0.6 percent on the day. Speaking in Davos, where he is attending the World Economic Forum, Mr Trump said “frankly nobody should be talking about the dollar’s value” before adding he supported a strong US currency. He said: “Our country is becoming so economically strong again and strong in other ways too, by the way, that the dollar is going to get stronger and stronger and ultimately I want to see a strong dollar.” The euro’s rise continued despite Mr Draghi’s insistence that the ECB would consider loosening its monetary policy should a weak dollar lead to an “unwarranted” rise in the cost of money in Europe.

Live from inside DAVOS Summit 2018 Fri, January 26, 2018 Behind the scenes at the World Economic Forum in Davos, Switzerland Play slideshow EPA 1 of 30 Donald J. Trump adresses a plenary session during the 48th Annual Meeting of the World Economic Forum (WEF) in Davos, Switzerland, 26 January 2018