Fed Chair Says No Currency Manipulation Clause on TPP

U.S. central bank chief Janet Yellen said Tuesday she is opposed to the idea of adding clauses banning currency manipulation to any trade deals, such as an envisioned Pacific free trade initiative.

Yellen, chairwoman of the Federal Reserve, told a congressional hearing that inclusion of such clauses in the U.S.-led Trans-Pacific Partnership deal and other trade agreements would “hamper or even hobble monetary policy.”

Yellen took the position as some U.S. lawmakers have been increasingly displeased at monetary easing measures in other countries that could result in lowering the value of their currencies, as the recent appreciation of the dollar against other major currencies has hurt American exporters.

Some U.S. lawmakers are seeking to introduce a bill that would authorize tariffs on imported products if the United States formally recognizes a monetary policy in the trade partner as currency manipulation.

“I would really be concerned about a regime that would introduce sanctions for currency manipulation into trade agreements,” Yellen told the Senate’s Committee on Banking, Housing and Urban Affairs in answering a question.

via Mainichi

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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