Yuan Strengthens With Yellen Decision Not to Label China on FX
(Bloomberg) -- The offshore yuan notched its first gain in four days on Monday after a report that U.S. Treasury Secretary Janet Yellen will refrain from naming China a currency manipulator.
The offshore yuan advanced around 0.2% to 6.5480 per dollar, and at one point strengthened to 6.5461. It remains around 0.7% weaker so far in 2021.
The currency touched its intraday peak after people familiar with the matter confirmed that the Treasury’s upcoming semi-annual foreign-exchange report -- which has not yet been finalized and is the first of Yellen’s tenure -- won’t label China a manipulator.
The new U.S. administration is currently in the process of re-evaluating America’s relationship with China more broadly. The move by the Treasury Department is likely to do little on its own to budge the U.S.-China relationship, analysts suggested, but it does at least does not represent a further deterioration amid an increase in geopolitical and trade tensions.
During the Trump era, the Treasury Department was accused of politicizing the FX report after it abruptly designated China a manipulator in mid-2019 outside its usual release schedule, only to lift the label five months later to win concessions in a trade deal.
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