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🇲🇽🏦ING On Treasury’s FX report. Monitoring List: China To Stay, Mexico And Ireland To Join

Updated: Apr 14, 2021

ING's Preview on Treasury's FX Report landed on the desk this morning. They see China staying in the monitoring list and Mexico joining as it fall in two of the three criteria.


When a country meets only two of the three criteria, it is normally included in the Monitoring List, and will face closer scrutiny of its trading and currency practices. As of December 2020, there were ten countries in the Monitoring List: China, Japan, Korea, Germany, Italy, Singapore, Malaysia, Taiwan, and India

Assuming that Taiwan and Thailand are named FX manipulators and considering a country is excluded from the list if it fails to meet two criteria for two consecutive Reports, we do not expect any of the listed countries to be removed from the watchlist. China was previously included despite meeting only one criterium, but the rise in C/A surplus to 2.0% of GDP in 2020 legitimizes its presence in the list. Mexico and Ireland should be the two additions to the Monitoring List, as they both showed high trade surplus with the US and C/A surplus, but are safe in an FX-intervention perspective, so the market impact of being included in the list should be limited. The chart below summarizes what we expect to see in the Spring edition of the Treasury’s FX Report.



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