UOB Group’s Senior Economist Alvin Liew and Senior FX Strategist Peter Chia give their opinion on the recent FX report by the US Treasury.
“The US Treasury released its long overdue semiannual Report on ‘Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States’ to the US Congress on Monday (13 Jan), where it declared that China is removed from being labeled as a currency manipulator and will be returned to the Monitoring List”.
“The Monitoring List continues to include Japan, South Korea, Germany and five other countries which were added for the first time in May 2019 - Ireland, Italy, Vietnam, Singapore and Malaysia. Switzerland, which was briefly removed from the List in May 2019, was re-included again in this report. The Treasury also indicated that it may remove Ireland from the List in the next report and may include Taiwan and Thailand, which are ‘close to triggering key thresholds’.”
“USD/CNY is back below 6.90, a level last seen in Aug 2019 but is probably oversold in the near term.”
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