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Treasury Lists Switzerland & Vietnam as Currency Manipulators
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After reviewing the policies of 20 trading partners, the U.S. Treasury Department has declared Vietnam and Switzerland as currency manipulators in its semi-annual foreign exchange report. Also, the regulator has added three new names — Taiwan, Thailand and India — to the monitoring list.
Vietnam and Switzerland met the three key criteria laid down by the Treasury, which includes having a bilateral goods surplus of at least $20 billion and current account surpluses in excess of 2% of U.S. GDP.
Further, the last criteria assessed persistent, one-sided intervention of net purchases of foreign currency, conducted repeatedly in at least six out of 12 months, totaling at least 2% of an economy’s GDP.
“The Treasury Department has taken a strong step today to safeguard economic growth and opportunity for American workers and businesses,” said U.S. Treasury Secretary Steven T. Mnuchin. “Treasury will follow up on its findings with respect to Vietnam and Switzerland to work toward eliminating practices that create unfair advantages for foreign competitors.”
While the declaration does not have an immediate impact on these countries, the Treasury will commence enhanced bilateral discussions with each of them, under which they will be required to develop a plan with specific policy actions to address the underlying causes of currency undervaluation and external imbalances.
Of the 10 names placed on the watchlist, nine trading partners met two of the criteria. However, China is said to have met only one of the three criteria in every report since the October 2016, having a significant bilateral trade surplus with the United States, which accounts as disproportionate.
Thus, the Treasury has asked China to improve transparency on its exchange rate management and increase public understanding of the relationship between the PBOC and the foreign exchange activities of the state-owned banks, including the use of foreign exchange derivatives and activities in the offshore RMB market.
Also, the regulator said that India and Singapore intervened in the foreign exchange market in a “sustained, asymmetric manner” but did not meet other requirements to be declared as manipulators.
Though this report focuses on involvement of the central banks in currency manipulation, several global banks over the years have been penalized and investigated for the same.
Globally, banks have faced more than $200 billion in penalties, in recent years, following investigations into their shady malpractices, including interest-rate manipulation, violation of agreements and inadequate selling of a number of financial products.
Accused banks include Bank of America, Barclays PLC, BNP Paribas, Citigroup (C - Free Report) , Credit Suisse , Deutsche Bank, Goldman (GS - Free Report) , HSBC Holdings PLC (HSBC - Free Report) ,JPMorgan, Morgan Stanley (MS - Free Report) ,Societe Generale and UBS Group AG (UBS - Free Report) .
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Treasury Lists Switzerland & Vietnam as Currency Manipulators
After reviewing the policies of 20 trading partners, the U.S. Treasury Department has declared Vietnam and Switzerland as currency manipulators in its semi-annual foreign exchange report. Also, the regulator has added three new names — Taiwan, Thailand and India — to the monitoring list.
Vietnam and Switzerland met the three key criteria laid down by the Treasury, which includes having a bilateral goods surplus of at least $20 billion and current account surpluses in excess of 2% of U.S. GDP.
Further, the last criteria assessed persistent, one-sided intervention of net purchases of foreign currency, conducted repeatedly in at least six out of 12 months, totaling at least 2% of an economy’s GDP.
“The Treasury Department has taken a strong step today to safeguard economic growth and opportunity for American workers and businesses,” said U.S. Treasury Secretary Steven T. Mnuchin. “Treasury will follow up on its findings with respect to Vietnam and Switzerland to work toward eliminating practices that create unfair advantages for foreign competitors.”
While the declaration does not have an immediate impact on these countries, the Treasury will commence enhanced bilateral discussions with each of them, under which they will be required to develop a plan with specific policy actions to address the underlying causes of currency undervaluation and external imbalances.
Of the 10 names placed on the watchlist, nine trading partners met two of the criteria. However, China is said to have met only one of the three criteria in every report since the October 2016, having a significant bilateral trade surplus with the United States, which accounts as disproportionate.
Thus, the Treasury has asked China to improve transparency on its exchange rate management and increase public understanding of the relationship between the PBOC and the foreign exchange activities of the state-owned banks, including the use of foreign exchange derivatives and activities in the offshore RMB market.
Also, the regulator said that India and Singapore intervened in the foreign exchange market in a “sustained, asymmetric manner” but did not meet other requirements to be declared as manipulators.
Though this report focuses on involvement of the central banks in currency manipulation, several global banks over the years have been penalized and investigated for the same.
Globally, banks have faced more than $200 billion in penalties, in recent years, following investigations into their shady malpractices, including interest-rate manipulation, violation of agreements and inadequate selling of a number of financial products.
Accused banks include Bank of America, Barclays PLC, BNP Paribas, Citigroup (C - Free Report) , Credit Suisse , Deutsche Bank, Goldman (GS - Free Report) , HSBC Holdings PLC (HSBC - Free Report) , JPMorgan, Morgan Stanley (MS - Free Report) , Societe Generale and UBS Group AG (UBS - Free Report) .
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>