FX Comment US Treasury FX Report No “Currency Manipulators” and a More Constructive Tone

Economics Research 24 July 2026 | 8:40AM EDT

FX Comment: US Treasury FX Report: No “Currency Manipulators” and a More Constructive Tone

Bottom Line: The recently released semi-annual US Treasury report to Congress on Lexi Kanter | “Foreign Exchange Policies of Major Trading Partners of the United States” did not Goldman Sachs & Co. LLC identify any major US trading partner as a “currency manipulator.” No additions were Michael Cahill made to the Monitoring List which continued to include China, Japan, Korea, Taiwan, | Singapore, Vietnam, Germany, Ireland, Thailand, and Switzerland. This report notes Goldman Sachs International

that Thailand, Singapore, and Switzerland met only one criterion and will be removed from the Monitoring List if they meet fewer than two criteria in the next reporting period. This report reiterates that Treasury has strengthened its analysis of trading partners’ currency policies and practices as detailed in the January 2026 Report.

1. In this report, China, Japan, Korea, Taiwan, Vietnam, Germany, and Ireland met the criteria for having a significant bilateral surplus and a material current account surplus. Singapore and Switzerland met the criteria for having a material current account surplus while Thailand met the criteria for having a significant bilateral surplus. As Thailand, Singapore, and Switzerland only met one criterion this report notes they will be removed from the Monitoring List if they meet fewer than two criteria in the next reporting period.

2. We previously highlighted that the administration will be considering a broader scope of criteria including government investment vehicle activity, foreign exchange reserve coverage, capital controls, monetary policy, and “asymmetric” intervention including more active and/or larger intervention in the context of appreciation pressure. This report once again detailed the practices of entities including GPIF and Japan Post Bank in Japan and the NPS in Korea though it removed the section on the China Investment Corporation. The report did not find recent practices problematic, especially in a backdrop where both Japan and Korea have been facing outsized depreciation pressures. Overall, the wider scope of analysis has so far not been a substantial factor in the Treasury’s findings, although this report did note that recent changes to Taiwan’s FX hedging regulations for life insurers “also may contribute to reduced appreciation pressure on the TWD.”

3. The July report relaxed its language on China somewhat. For example, rather than emphasizing the importance of allowing the RMB to strengthen in a “timely and orderly manner in line with macroeconomic fundamentals,” the July report noted that “authorities shifted to allowing a gradual and managed pace of RMB appreciation against the dollar through end-2025 as trade tensions abated.” The July report also omitted some prior language that said Chinese policies “suppressed imports,” and reinforced “excessive reliance on export growth.” And after acknowledging that China’s sovereign wealth fund does not actively transact in FX, Treasury dropped the section on China Government Investment Vehicles. That said,

Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to

this report reiterated previous language stating that China’s relative lack of transparency will not prevent Treasury from identifying China as a manipulator despite the limitations of existing proxy measures and again took note of “large-scale non-market support for domestic manufacturing.” Overall, we read the Treasury’s assessment as moderately more constructive, including by acknowledging recent measures to allow RMB appreciation, while still encouraging authorities to go further.

4. The Dollar’s depreciation over 2025 helped contribute to a more constructive tone throughout the report as Treasury acknowledged that many major trading partners had allowed their currencies to appreciate and FX reserve accumulation was limited. The report also softened its previous assessment that particular countries were…