The government and Treasury now closely monitor more than just the spot rate. In addition to intervening in foreign-exchange markets, governments employ “capital-flow” management and “non-market” tools to enhance their countries’ competitiveness in global markets and, in some cases, make such influences less apparent. These decisions can move quickly from technical to political.
Why transparency, disclosure, and routine monitoring are imperative
As a result, transparency has also emerged as a key tool in currency management. The timing and frequency of foreign-exchange disclosures help determine credibility among counterparts and other market participants, who judge the likelihood of an intervention affecting the stability of their country’s finances or ability to adjust to changes in the global economy.
Additionally, because of the rapid politicization of shifts in the external balances of countries, the regular monitoring of compliance with agreed-upon rules has become the norm.
In that context, on January 29, 2026, the U.S. Department of the Treasury issued the bi-annual Report to Congress on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States. According to the Treasury, it examined the policies of trading partners accounting for approximately 78% of all U.S. foreign trade in both goods and services, for the four consecutive quarters ending in June 2025.
What the report says is being strengthened, and why
This includes more closely monitoring foreign-exchange interventions and “non-market” policies and practices that could be used to unfairly manipulate exchange rates to achieve competitive advantages in trade.
He further explained that these enhanced evaluations are expected to provide additional information to the Treasury’s assessments of the currency policies and practices of major trading partners.
The report also reiterated that the Treasury uses the same statutory criteria as specified in the Omnibus Trade and Competitiveness Act of 1988 to assess whether the actions of trading partners are designed to either impede effective balance-of-payment adjustments or obtain an unfair competitive advantage.
Engagement signals, conclusions, and what it means for markets
The Treasury emphasized that as part of the Administration’s America First Trade Policy, it initiated conversations in the spring of 2025 with trading partners that were previously included on the Treasury’s Monitoring List. Treasury also noted that it had jointly released statements with authorities from six major trading partners (Japan, Switzerland, Malaysia, Thailand, Korea, and Taiwan) that reinforced ongoing consultations and restated their commitment to refrain from using exchange rates as a means of obtaining competitive advantages in trade.
According to the rthe joint statements intendents is to emphasize the importance of transparent currency policies and to promote more frequent and timely foreign-exchange disclosures to decrease the uncertainty surrounding government actions. Based on the 1988 Act, the Treasury determined that none of the major U.S. trading partners engaged in manipulation of the rate of exchange between the dollar and the currency of their respective country for the purpose specified in the statute for the four consecutive quarters through June 2025.
What the assessment signals to markets
Therefore, the main takeaway for businesses and investors is the trend toward more detailed and structured analysis, coupled with more formalized consultation processes and statements that focus on promoting greater transparency.
Policymakers and market participants should recognize that the supervision of currency issues is no longer viewed solely as a one-time determination or decision-making process but rather as an ongoing governance process. The use of more formal consultation and clearly articulated expectations for disclosure may assist in minimizing misinterpretations during times of volatility and provide businesses with clearer guidance on policy intentions. Over time, this combination may help to shape the pace at which currency-related issues escalate and the degree to which markets reflect the risks associated with international transactions.
