U.S. Treasury: Can’t Say China a Forex Manipulator
A U.S. Treasury report declined to label China a ‘currency manipulator,’ a move that upset some U.S. lawmakers, but which analysts note was a necessary cautious move given the two countries’ economic intertwinement. From Reuters:
he Obama administration declined to name China a currency manipulator on Friday, even though it said the yuan was “substantially undervalued,” sparking fresh calls for legislative retaliation to try to reduce a swelling U.S. trade deficit.
Treasury said China’s yuan CNY=CFXS should rise more quickly but said it lacked evidence to label Beijing a manipulator, a designation that could trigger trade action.
[...] The United States had a trade deficit of $252 billion with China during the first 11 months of 2010. Some of the largest U.S. retail chains source the vast majority of their products from Chinese factories.
The United States also relies on China to buy the bulk of the weekly flood of debt securities that Treasury sells.