Free Trial

### POV: US TSY UNLIKELY TO DECLARE CHINA A...>

CHINA
CHINA: ### POV: US TSY UNLIKELY TO DECLARE CHINA A CURRENCY MANIPULATOR
Before he became President Donald Trump noted that he would declare China a FX
manipulator on day 1 in office, he has failed to do so & the US Tsy will likely
stop short of declaring China an FX manipulator in its semi-annual report (due
April 18). The US Tsy focuses on 3 criteria. 1) A sig. trade surplus with US (at
least $20bln), 2) a sig. current a/c surplus (>3% of GDP) 3) persistent &
one-sided currency intervention (> 2% of GDP).
- As of the Oct 2017 report China was on the "monitoring list" which represents
countries which meet 2 of the 3 criteria or that contribute to a
disproportionate share of the US trade deficit.
- True, China breaches the trade restrictions outlined above, but its current
account deficit is narrowing and is under the threshold outlined by the Tsy.
- On the currency front China has been a USD seller, guarding against further
CNY depreciation in the wake the 2015 devaluation. USDCNY has fallen roughly 10%
from its late 2016/early 2017 peak and closed at ~6.3000 in front of the
elongated holiday weekend.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.