Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

U.S. stops short of declaring Vietnam, Switzerland, Taiwan currency manipulators

ForexApr 16, 2021 12:31PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
3/3 © Reuters. FILE PHOTO: The United States Department of the Treasury is seen in Washington, D.C. 2/3

By David Lawder and Andrea Shalal

WASHINGTON (Reuters) -The U.S. Treasury Department on Friday said Vietnam, Switzerland and Taiwan tripped its thresholds for possible currency manipulation under a 2015 U.S. trade law, but refrained from formally branding them as manipulators under a separate law.

In the first semi-annual foreign exchange report issued by Treasury Secretary Janet Yellen, the Treasury said it will commence "enhanced engagement" with Taiwan and continue such talks with Vietnam and Switzerland after the Trump administration labeled the latter two as manipulators in December.

Treasury said Taiwan, Vietnam and Switzerland exceeded its 2015 currency thresholds during 2020 - a more than $20 billion bilateral trade surplus with the United States, foreign currency intervention exceeding 2% of gross domestic product and a global current account surplus exceeding 2% of GDP.

Despite this finding, Treasury said there is insufficient evidence under an earlier 1988 law to conclude that Vietnam, Switzerland, or Taiwan are manipulating their exchange rates to gain a trade advantage or prevent balance of payments adjustments.

"For calendar year 2020, we have not made a finding regarding the manipulation designation," a Treasury official told reporters, adding: "We don't view this as a mixed message."

A Treasury official said it was possible for countries to meet the tests under the "mechanical" 2015 law and not be manipulating their currency to boost exports.

He said the report's findings take into account the massive trade and capital flow distortions of the COVID-19 pandemic and the fiscal and monetary policy choices governments took to respond to it.

Without the pandemic, the "results would have likely been quite a bit different," including for the three economies that hit the engagement triggers, the official added.

Treasury's report also said the COVID-19 crisis was likely to continue to affect current account positions over the next year as recoveries accelerated in some economies and lagged in others, adding that these changes were cause for concern.

ACTION PLANS

The enhanced engagement includes formal talks to urge Vietnam, Switzerland and Taiwan to develop plans with specific actions to address underlying causes of currency undervaluation and external imbalances, Treasury said in a statement.

The talks also will help Treasury determine the reasons for the three trading partners to make substantial currency market interventions.

For Taiwan, Treasury said it would initiate enhanced engagement in line with the Trade Facilitation and Trade Enforcement Act of 2015. It expects those talks to help determine if Taiwan manipulated its currency under the 1988 law.

Switzerland rejected Treasury's assessment and denied that it engaged in any form of currency manipulation.

An official with Taiwan's central bank said the U.S. decision showed that there was continued good communication between Taipei and Washington on the issue and that U.S. authorities understood Taiwan's "special situation."

No immediate reaction was available from Vietnam.

MEXICO, IRELAND MONITORED

Treasury said no other major U.S. trading partner met the relevant 1988 or 2015 legislative criteria for currency manipulation or enhanced analysis during the review period.

Treasury urged China to improve transparency regarding its foreign exchange intervention activities, the policy objectives of its exchange rate management regime, the relationship between the central bank and foreign exchange activities of the state-owned banks, and its activities in the offshore yuan market.

Treasury said it found that 11 economies warrant placement on Treasury’s "Monitoring List" of major trading partners that merit close attention to their currency practices: China, Japan, South Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand, and Mexico. All except Ireland and Mexico were included in the December 2020 report to Congress.

Reaction in the foreign exchange market was muted, with the Swiss franc modestly stronger and the Mexican peso only slightly weaker.

Analysts said the report may take some pressure off Vietnam and Switzerland and would not deter the Swiss National Bank's ultra-expansive monetary policy.

"This strikes me as a political decision, not a rules-based decision," said Thierry Wizman, global interest rates and currencies strategist at Macquarie Group (OTC:MQBKY), adding that the Treasury appeared to be trying to determine the intent of foreign exchange policies.

"It sounds like the administration is trying not to offend allies here ... those allies that are going to be most important in containing China," Wizman said.

U.S. stops short of declaring Vietnam, Switzerland, Taiwan currency manipulators
 

Related Articles

Dollar Edges Higher; Commodity Currencies Limit Gains
Dollar Edges Higher; Commodity Currencies Limit Gains By Investing.com - May 11, 2021 1

By Peter Nurse Investing.com - The dollar edged higher in early European trade Tuesday, but gains were capped by the strength of commodity currencies on the back of rises in the...

Dollar Up, but Increasing Commodity Prices Limit Gains
Dollar Up, but Increasing Commodity Prices Limit Gains By Investing.com - May 11, 2021

By Gina Lee Investing.com – The dollar was up on Tuesday morning in Asia, but gains were capped by expectations that already-surging commodity prices will rise further. The U.S....

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (6)
President Xi Jinping
President Xi Jinping Apr 17, 2021 4:26PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The leaders of those countries hurt their own people forcing them to be bottom feeders
Feren Nika
Feren Nika Apr 17, 2021 6:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
yellen, biden manipulator, high debt, printing money, manipulation stock market, not real data. i hope usa big collapse and bankrupt.
pete lorenz
pete lorenz Apr 16, 2021 2:04PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Ultimate FAIRLURE ultimatliy u can live on the high horse with all this debt
Jim Jones
Jim Jones Apr 16, 2021 11:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
USA is the biggest currency manipulator of them all. If they let the free market determine lending prices, the country would collapse.
Rohan Daley
Rohan Daley Apr 16, 2021 11:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Shazam
Shazam Apr 16, 2021 10:43AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Always hilarious when USA of all countries call out other nations.
Kaveh Sun
Kaveh Sun Apr 16, 2021 10:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Be thankful that they r byuing usd. Otherwise usd tanks
Ronald Warren
Ronald Warren Apr 16, 2021 10:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Fact: In seven years China will pass the U.S. as the world's largest economy. They are doing much better at debt management. It wouldn't surprise me if the Yuan becomes the reserve currency.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email