Reuters: US Dollar Report: UPDATE 1-U.S. withholds China currency manipulator label

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UPDATE 1-U.S. withholds China currency manipulator label Nov 27th 2012, 21:23 Tue Nov 27, 2012 4:23pm EST By Anna Yukhananov WASHINGTON Nov 27 (Reuters) - The U.S. Treasury on Tuesday said China's currency remained undervalued but stopped short of labeling the world's second-biggest economy a currency manipulator. A Treasury official said China had allowed the yuan to appreciate 9.7 percent in nominal terms since June 2010, in the department's semi-annual currency report. The yuan closed at a record high on Tuesday. During the U.S. presidential campaign, Republican candidate Mitt Romney pledged to label China a currency manipulator on his first day in office to show he would be tougher on the United States' chief economic competitor than President Barack Obama. Businesses have argued China kept its currency artificially low to gain an advantage in trade. But experts said Romney would have lacked the legal power to do so, since the U.S. Treasury has the sole authority to make the accusation. On Tuesday, the Treasury department said China did not currently meet the legal requirements to be a currency manipulator. The Chinese government had "substantially" reduced its intervention in exchange markets since the third quarter of 2011 and loosened capital controls, the Treasury said in its report, which examines the foreign exchange practices of major U.S. trading partners. "In light of these developments, Treasury has concluded that the standards identified in (the Act on currency manipulators) have not been met with respect to China," Treasury said. "Nonetheless, the available evidence suggests the renminbi remains significantly undervalued." The yuan closed at a record high on Tuesday as the central bank's reluctance to let the currency rise faster limited trading activity. Link this Share this Digg this Email Reprints

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