Bloomberg reports that the Trump administration will expand the number of countries it scrutinizes for currency manipulation in an upcoming report, people familiar with the matter said, after lowering the bar for foreign governments to come under scrutiny.
So far, Treasury has examined its 12 largest trade partners and Switzerland. An expanded watch list could include Russia, Thailand, Indonesia, Vietnam, Ireland or Malaysia, all of which have large trade surpluses with the U.S.
But specifically, Bloomberg reports that Vietnam may be named a manipulator outright for artificially holding down its dong, the people said, after meeting all three criteria the Treasury Department uses to test for currency interventions.
Internal debate is continuing over the issue and the administration has asked Vietnam to disclose more information before it releases the report.
While we do not know what specific criteria is used, we do note that the Dong has been materially limp relative to the excited surge in positivity that has seen Vietnam’s CDS spread collapse.
The label has no practical effect, other than requiring the U.S. to engage in negotiations with offending countries, but would perhaps have market repercussions for any government named a manipulator.
The U.S. has not labeled a major trade partner a currency manipulator since 1994.
via ZeroHedge News http://bit.ly/2vMORca Tyler Durden