The U.S. Treasury on Monday softened its stance on China's currency. In its semi-annual report on exchange rates, Treasury dropped its prior assertion that China's currency is "significantly undervalued." Instead, the report said the yuan "remains below its appropriate medium-term valuation." The administration said the near-term trajectory of China's currency is "difficult to assess" given economic uncertainties, volatile capital flows and prospects for slower growth" in the country. China's currency has depreciated 2.3% against the dollar through September after the country's surprise announcement in mid-August that it was altering how it set its daily reference rate. Overall, the report concluded that no major U.S. trading partner, including China, has manipulated their currencies over the past six months to keep them undervalued.
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