Treasury FX report preview: Manipulation thresholds not breached despite USD decline
The desk observes that the US Treasury's upcoming FX report is unlikely to label any country as a currency manipulator despite the recent depreciation of the USD. This aligns with the commentary from ING, which notes that none of the major trading partners breached the manipulation thresholds set by the Treasury. Notably, the focus remains on the Swiss National Bank as it appears to be cautious about interventions to stay compliant with US standards. With our internal targets for the EUR/USD at 1.1700 by March 2026, this report may also frame how traders reassess their positions ahead of the report's publication.
What the desk is arguing
The desk maintains that the upcoming US Treasury FX report will not designate any country as a currency manipulator, as posited in the full note from ING. The absence of any country breaching the Treasury's three manipulation criteria reinforces this outlook, with the USD seeing notable depreciation without accompanying manipulator labels.
Data reveals that there has been a sustained USD decline which has not triggered manipulative actions from trading partners. This context indicates a broader stabilization in global currency dynamics even as we adjust our models for upcoming trading adjustments.
Where it sits in our coverage
Our consensus target for EUR/USD is currently set at 1.1700, with the per-firm forecasts showing a range between 1.1300 and 1.2200 for March 2026. Specific targets from major firms include: - commerzbank: 1.1900 - goldman: 1.1800 - mufg: 1.1800
This perspective aligns with the broader market sentiment reflected in the cross-firm consensus, where slight variation exists but overall expectations center around similar levels. Our call slightly favors the upper limit of this forecast range, positioning us optimistically relative to peer views.
How other firms see it
In the context of aligned sentiment, firms such as citi and hsbc share a bullish outlook on the EUR/USD trajectory, reflecting a general market optimism. On the contrary, nomura appears more hesitant, projecting more conservative targets that might reflect differing economic analyses.
The position of USD/JPY is particularly relevant, as shifts in USD sentiment also impact views on the JPY amid ongoing Bank of Japan policy considerations.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01The US Treasury FX report is expected to not label any country as a currency manipulator.
- 02No country has breached the manipulation thresholds necessary for a designation, keeping the current monitoring list intact.
- 03The Swiss National Bank is increasingly cautious about currency interventions amid USD depreciation.
- 04Our internal EUR/USD target is well within consensus expectations, reflecting market optimism.
Market implications
A focus on the 1.1700 level for EUR/USD will be critical as traders anticipate the FX report's implications. Movement beyond current levels should be closely monitored for shifts in positioning as the report date approaches.
Risks to this view
A significant catalyst for invalidating this outlook could be a marked intervention by any of the central banks included on the monitoring list, particularly should the SNB undertake more aggressive measures to counter USD depreciation.
EUR/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
Goldman Sachs | — | 1.1200 |
UOB | — | 1.1445 |
MUFG | — | 1.1800 |
Articles Treasury FX report preview: Manipulation thresholds not breached despite USD decline 19:15 FX Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download The summer edition of the US Treasury’s FX report (covering 2025) looks unlikely to label any country a currency manipulator, as no trading partner breached all three criteria despite USD depreciation, according to our estimates. Still, the Swiss National Bank may be turning more cautious on intervention to stay within the Treasury’s thresholds Francesco Pesole We do not expect the summer edition of the US Treasury's FX report to label any country as a currency manipulator The US Treasury should publish the summer edition of its semi-annual Report on Foreign Exchange Policies of Major Trading Partners (the “FX Report”) soon. The report is prepared under two legislations: - The 1988 law requiring the Treasury to identify foreign exchange manipulators - The 2015 law introducing three quantitative criteria (chart below) – thresholds have been revised over time – for evaluating trade and FX practices.
FX report criteria thresholds Source: US Treasury, ING "> Source: US Treasury, ING No manipulator labels, unchanged monitoring list The summer edition covers January-December 2025, with the Treasury set to assess the three quantitative criteria, which we attempt to replicate in the table below. Our baseline assumption is that a country is labelled an FX manipulator if all three criteria are met. As no country appears to have breached all three thresholds, we expect no manipulator designations this summer.
The report also updates the Monitoring List for enhanced scrutiny, including countries meeting two criteria or contributing disproportionately to the US trade deficit. Removal typically requires missing two criteria for two consecutive reports. The January 2026 list included China, Japan, Korea, Taiwan, Thailand, Singapore, Vietnam, Germany, Ireland and Switzerland, and we expect it to remain unchanged.
ING's estimates for the FX report's criteria Figures in red are above the criteria's thresholds. Estimates are based on disclosed interventions when available or through the valuation-adjusted change in FX reserves, attempting to replicate the US Treasury's methodology. *China's FX interventions estimated via monthly changes in the PBOC’s foreign exchange assets ** Malaysia, Thailand and Vietnam convey intervention numbers privately to the Treasury, making it harder to estimate via FX reserves, we present ballpark estimates here. Source: ING estimates, Macrobond, IMF, Central bank disclosures "> Figures in red are above the criteria's thresholds.
Estimates are based on disclosed interventions when available or through the valuation-adjusted change in FX reserves, attempting to replicate the US Treasury's methodology. *China's FX interventions estimated via monthly changes in the PBOC’s foreign exchange assets ** Malaysia, Thailand and Vietnam convey intervention numbers privately to the Treasury, making it harder to estimate via FX reserves, we present ballpark estimates here. Source: ING estimates, Macrobond, IMF, Central bank disclosures Context matters The fundamental aim of the FX Report is to flag practices that artificially prevent appreciation of trading partners’ domestic currencies, potentially granting a competitive trade advantage. This edition is notable as it cleanly captures 2025, a period of sharp USD depreciation, unlike the previous report, which mixed in late-2024 dollar strength.
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