Currency futures are likely to be affected in the coming months by China’s eventual decision on whether to stop artificially inflating its currency value.
In recent testimony before the Senate Finance Committee, Treasury Secretary Timothy Geithner said that the U.S. is working on a variety of important trade issues, from enforcement of intellectual property rights to giving American companies in China access to a level playing field to reforming the valuation of the renminbi.
China has long drawn criticism from observers accusing it of manipulating currency values to give its exporters and manufacturers an unfair advantage over companies in the United States and elsewhere. However, momentum on this issue stalled somewhat in recent weeks as many Chinese companies saw their revenues hit in connection with the falling euro and the European debt crisis.
“Reform of China’s exchange rate is critically important to the United States and to the global economy. And it is in China’s own interest to allow the exchange rate to reflect market forces,” Geithner told the Finance Committee.
Despite the currency policies in Beijing, Geithner also highlighted the strong growth that exports to China from the United States have seen in recent months.
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