The greenback initially got a boost from the Fed report and from data showing China's trade surplus with the United States swelled to a record high in June, which could further inflame a trade dispute between Beijing and Washington.
The figures come after the two sides exchanged tit for tat tariffs on billions of dollars worth of goods and Donald Trump threatened to up the ante with measures on a colossal $200 billion of Chinese imports.
Pressed on the possible negative impact of multiple trade disputes on the USA economy, Mnuchin said the Trump administration was keeping a watchful eye.
Last Friday, Trump rolled out 25% tariffs on $34 billion of Chinese goods. Imports expanded by 14.1 per cent to $175.1 billion, down from the previous month's 26 per cent.
Analysts expect shipments growth to slow in the second half of the year, putting more strain on an economy already feeling the pinch from a multi-year debt battle that has driven up corporate borrowing costs. They are hampering global economic growth.
However, a lower yuan would make it more expensive for China to import USA goods.
But, he said, China has another option - Beijing could reduce the impact of U.S. tariffs on exporters by devaluing the yuan to make its goods cheaper for American consumers.
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But in a statement coming from the Chinese Commerce Ministry, The Asian nation said the surplus was overestimated and caused by America's own "domestic structural problems".
China's total exports rose 11.3% year-on-year in June, beating a Bloomberg News forecast of 9.5%.
"So we would be back to square one", Mr Kuo said, with China exporting more to the U.S. than it buys from the country.
The trade balance between the two countries, which is at the centre of the trade dispute, continued to move in favour of China.
The benchmark S&P 500 index hit a more than five-month high on Friday on gains in industrial stocks and energy companies, while the safe-haven USA dollar flattened after touching a two-week high. Its trade surplus with the United States over the same period was $133.76bn, up from $117.51bn past year.