Currency manipulation: US Treasury added Switzerland to watch list

The U.S. Treasury said on Friday that none of the United States' major trading partners is manipulating its currency to gain advantage for its exports; the declaration was an answer to Republican presidential candidate Donald Trump that he will be ready to declare China a currency manipulator if he is elected.

In its 16th and final currency report under US President Barack Obama, the Treasury said it added Switzerland to a foreign exchange “monitoring list” of countries with high external surpluses or currency market interventions and it kept Taiwan, China, Japan, Germany and South Korea on the list, first launched in April, though, it said, none of the six countries met the standard for enhanced scrutiny under a new trade enforcement law passed in 2015.

The Treasury "concluded that no major trading partner of the United States met the standard of manipulating the rate of exchange between its currency and the United States dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade."

Switzerland got on the list because of its trade growth with the US in the past year, a large current account surplus and consistent purchases by the Swiss National Bank (SNB) of foreign assets since it abandoned last year what was effectively a euro peg. At the same time, Switzerland’s bilateral trade surplus with the U.S. is below the trigger level for the watch list.