Treasury's Currency Monitoring: Shifts in Global Trade Dynamics

The U.S. Treasury Department's latest semi-annual report concluded that no major trading partners manipulated their currencies as of June 30. While countries like Vietnam and Switzerland faced prior scrutiny, the focus remains on close surveillance of foreign exchange interventions, particularly concerning China and Japan.

The U.S. Treasury Department announced in its latest semi-annual currency report that no major trading partner was found to have manipulated its currency in the year up to June 30. This report, the final one before President-elect Donald Trump's administration assumes responsibility, marks a key transition period in U.S. oversight of foreign exchange practices.

The Trump administration had previously identified Vietnam and Switzerland as currency manipulators in 2020 following interventions to devalue their currencies. The report points out how, overall, foreign exchange strategies have shifted towards efforts to appreciate local currencies against the strong U.S. dollar in the fight against inflation.

Throughout President Joe Biden's term, the Treasury did not declare any currency manipulation but raised concerns about China's foreign exchange operations. The recent Treasury analysis highlights several countries, including China, Japan, and South Korea, for enhanced scrutiny due to their substantial trade surpluses and foreign exchange strategies.

(With inputs from agencies.)