Senators urge U.S. to combat China currency policy

A bipartisan group of 15 U.S. senators on Thursday insisted China’s currency practices are effectively a subsidy and urged Commerce Secretary Gary Locke to consider action against Chinese imports.

“There can be no doubt that China’s policy of large-scale intervention in the exchange markets and the significant undervaluation of its currency acts as a subsidy to Chinese exports,” the senators said in a letter that increased pressure on President Barack Obama to deal with the currency concern.

U.S. lawmakers and manufacturers have complained for years that China undervalues its currency by as much as 40 percent to give its companies an unfair trade advantage.

Beijing bristles at the suggestion it is “manipulating” its currency, known as the renminbi or yuan. It is likely to react strongly to any U.S. action based on that conclusion.

Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza