US Treasury secretary Bessent: I don’t want others to manipulate their currencies

• US has a strong dollar policy
• But don’t want others to manipulate their currencies
• China’s yuan is hard to value
• But on any academic model, the yuan is cheap
• Aims to tell China to rebalance their economy
• Will have first call with China counterpart tomorrow
• Revaluing gold reserves is not what I had in mind
• Haven’t seen Europe cut auto tariffs yet

Interestingly enough, he says that the Fed has overdone it with their rate cut in September last year. But then again, Trump wants more rate cuts by the Fed now. So, what’s the picking point here? As for the yuan, the lack of steep tariffs by Trump has allowed China to keep their currency steadier since the turn of the year. USD/CNY had been on the verge of breaking to its highest since 2008 but is now back down to 7.25 levels, which sits just under the highs from last year.

This article was written by Justin Low at www.forexlive.com.