The U.S. Treasury announced on Thursday an expansion of how it evaluates foreign exchange practices, describing a wider focus that includes any deliberate efforts by other economies to counter depreciation pressure against the U.S. dollar. Despite the change in analytical approach, the Treasury did not designate any major trading partner as a currency manipulator.
In the department's most recent semi-annual currency report - which reviews activity across the second half of 2024 and the first six months of 2025 - officials concluded that no major trading partner satisfied all three criteria that would trigger enhanced scrutiny under U.S. law.
The report also updated the Treasury's monitoring list, adding Thailand because of growth in the country's global current account surplus and an increase in its trade surplus with the United States. Thailand's inclusion raises the total number of monitored jurisdictions to 10. The list retains China, Japan, South Korea, Taiwan, Singapore, Vietnam, Germany, Ireland and Switzerland.
Historically, the sem-annual report has concentrated on one-sided currency intervention or other measures taken to resist appreciation against the dollar - actions that can help keep a country's exports relatively cheap. The Treasury said it will now examine a broader set of smoothing activities.
As the department put it, it "is now monitoring more broadly the extent to which economies that choose to smooth exchange rate movements do so to resist depreciation pressure in the same manner as they do to resist appreciation pressure." That phrase frames the expanded analytical lens the Treasury will employ when assessing exchange-rate management.
When asked whether the change in focus was intended to increase scrutiny of any single country in light of recent weakness in the yen, a Treasury official said the adjustment was not targeted at any one nation. Instead, the official said the revision is meant to support the department's analytic work during potential future periods when the dollar is depreciating.
The report had been initially scheduled for release in November but was published with the updated language and the revised monitoring list. Beyond naming Thailand and reiterating the other monitored economies, the Treasury's findings for the covered period stopped short of identifying manipulation by any major U.S. trading partner.
Context and implications
- The expanded monitoring standard broadens the Treasury's remit to include smoothing aimed at countering depreciation as well as appreciation.
- Thailand's addition reflects observed increases in its current account surplus and bilateral trade surplus with the U.S., prompting closer attention.
- No country met the statutory threshold for enhanced analysis in the review period, and no manipulator designation was made.