U.S. Might Change Currency Test to Determine Forex Manipulator; Yuan Slips

Monday,   22-Oct-2018   12:47 PM (IST)

The Chinese yuan slipped on Monday amid reports that U.S. is considering changing its currency test that determines which nations are manipulating their currencies.The move could finally give U.S. President Donald Trump the chance to name China a forex manipulator, Bloomberg reported, adding that the U.S. could use a 1988 trade act with a broad definition of currency manipulation to designate a country a manipulator.In a semi-annual report released last week, the Treasury Department declined to label China or any other trading partner of the U.S. as currency manipulators, but added that Beijing and some other countries including Germany, Japan and India have been put on a watch list.The USD/CNY pair edged up 0.04% to 6.9333. The People's Bank of China (PBOC) raised the yuan's daily fixing by 151 pips to 6.9236 per USD Monday, vs Friday's fix of 6.9387 per USD.Meanwhile, the EUR/USD pair slipped 0.03% to 1.1512. Citing unnamed sources, Reuters reported over the weekend that the Italian government expected the European Commission to decide for the first time to ask a member state to revise its draft budget later this week."Italy’s 2.3 trillion euro ($2.65 trillion) public debt, one of the world’s largest, makes the country vulnerable and a potential source of contagion for other euro zone countries,” the source said.