This has been a concern but is a surprise
This Treasury report has been delayed since March and there were always worries that the Swiss would be named a manipulator.
They've been given a pass for years but this time they're being named a currency manipulator, along with Vietnam. No one else met all three criteria.
So far the market is taking it in stride.
The Treasury said it will begin with enhanced engagement with both countries to develop plans to resolve the causes of currency undervaluation. They said both countries exceeded the threshold by a 'sizeable margin'.
Meanwhile, the SNB is already fighting back saying it is willing to intervene more strongly in the FX market but also saying it's not a currency manipulator.
They add that their policy approach remains unchanged by the Treasury report.
It took them six minutes to respond to the Treasury report, which means they're either extraordinarily fast, or they knew it was coming.
The Treasury said possible remedies could include limiting access to US government procurement contracts or development finance.
Countries on the monitoring list are:
- China
- Japan
- South Korea
- Germany
- Italy
- Singapore
- Malaysia
- Taiwan
- Thailand
- India
More to come.
