How To Manipulate A Currency. Imagine this scenario: A country is selling more than it is buying and has a trade surplus. If markets are working correctly, its currency would become “strong” because the world is buying its currency to buy its stuff, so its goods would start to cost more. read more
But this was not derided by members of Congress or U.S. politicians as currency manipulation since the U.S. has friendly relations with Japan, and the Japanese yen was not undervalued at the time as is alleged for the Chinese yuan. read more
When China’s yuan falls against the U.S. dollar, Chinese products become cheaper in the U.S. market and American products become more costly in China. So the U.S. Treasury Department monitors China for signs it is manipulating the yuan lower. Treasury has guidelines for putting countries on its currency blacklist. read more