The US Treasury Department is likely again to avoid branding China a “currency manipulator” when it issues its twice yearly report on exchange rate policies on Wednesday, but it will aim to keep pressure on China and other Asian countries to allow their currencies to rise against the dollar.
The report has become a focus for anger from Congress and manu¬≠facturing companies over the rising US trade deficit with China, but recent signs of flexibility from Beijing appear to have tamped down some of the pressure. Instead, the Treasury appears likely to take broader aim at currency-related issues involving a number of Asian countries, particularly Japan.
The continued refusal to cite China for currency manipulation could mark the end of the strategy of using the threat of citation to force the revaluation of the renminbi. The US has not cited any country for “currency manipulation” since 1994, and Treasury officials say the term has become so politically loaded as to render it almost unusable.