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US Treasury says no major trading partner, including China, manipulated its currency in 2021

The US Treasury Department said on Friday that no major US trading partner, including China, manipulated its currency in 2021 to gain an unfair trade advantage.

Although China had a large bilateral trade surplus with the United States, it failed to meet the other two criteria to be called a manipulator – having a large current account surplus and engaging in persistent interventions.

The semi-annual report laments that China is not transparent about key features of its exchange rate mechanism and says the department will closely monitor the foreign exchange activities of China’s state-owned banks.

The Treasury has placed twelve economies, including China, on its “watch list” of major trading partners. Other countries on this list are Japan, South Korea, Germany, Italy, India, Malaysia, Singapore, Thailand, Taiwan, Vietnam, and Mexico.

The Treasury said it wanted to continue discussions with Switzerland on its intervention in the foreign exchange markets to prevent the Swiss franc from strengthening.

At the end of April, the US dollar reached its highest level against the euro since the end of 2002, peaking at 1.05 euro for one EURUSD dollar,
+0.03%,
very close to “parity” or the level at which a euro would be worth a dollar. Since then, the greenback has depreciated a little. Yet a popular gauge of the greenback’s strength against its main rivals – the ICE US Dollar Index – gained more than 13% DXY,
+0.94%
over the past year and more than 6% since the beginning of the year.

This week, the yen USDJPY,
-0.01%
fell to 134 against the greenback, for the first time since 2002.

See also: A strong dollar could trigger a repeat of the ‘Asian crisis’ of the 1990s if it crosses this threshold, warns the former Goldman economist

#Treasury #major #trading #partner #including #China #manipulated #currency

Post expires at 11:05pm on Tuesday June 21st, 2022

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