Most independently minded observers would say that the Chinese use their currency as a tool to aid their export sector and that it stays closely aligned to the US Dollar. Until recently, Donald Trump was making just such a claim about the Yuan and stating that it was giving the Chinese an unfair edge in the US market. I seem to recall that this was part of the motivation he cited when declaring a trade war with the Chinese in the first place. However, the official US position is that China is not manipulating its currency. Had that position changed, a certain course of action would have been mandated.
The good news, from a Chinese perspective, pushed the Yuan down to its weakest position against the Dollar since January 2017; it is currently trading at 6.9391 to the Dollar, having ended last week at 6.9219. Ironically, this makes Chinese imported goods a little cheaper in the US (before the trade war erupted in May, the Yuan was trading at 6.3616 to the Dollar).
There was speculation that the US Treasury was prepared to declare that China was manipulating its currency when it made this week’s declaration, but in the end, it rowed back from doing so. However, the Treasury is plainly not delighted with China, stating that its policies remained “of particular concern”. Treasury Secretary Steven Mnuchin blamed what the US saw as China’s lack of transparency and the recent weakness of its currency (say, since May…) as posing challenges to the US’s stated goal of achieving “more balanced trade” with it (the US position being that they want to export more to China and import less from them). This desire is behind the current crop of tariffs on more than $250 billion worth of Chinese imports, of course.
The Treasury is apparently scrutinising the currencies of India, Japan, South Korea, Switzerland and Germany for signs of manipulation. One wonders if they know the Germany uses the Euro and that, by implication, they are being suspicious about all 19 Euro state members, not just Germany…