Key U.S. senators irked by Chinese renminbi exchange rate games; E.U. bank regulators are now stressing out over bank stress test

Congress may act if White House ignores the renminbi issue – The top two members on the Senate Finance Committee have expressed their dissatisfaction with the recent Treasury Department report that failed to criticize China’s foreign exchange rate games. The legislators hail from Montana and Kansas which have important exporting sectors where foreign exchange rate fluctuations are a serious business concern. The Chinese currency practices harm ranchers, farmers, and exporters across America, said Sen. Max Baucus (D-MT), chairman of the Senate panel. The Chinese action was a small step in the right direction, but small steps are insufficient, he said. China must take significant steps to appreciate its currency and these should happen soon, Baucus said, adding that he is urging the Obama administration to be vigilant in pushing China on the exchange rate issue. Sen. Charles Grassley (R-IA), the ranking member of the committee, was not so diplomatic. The administration has again failed to identify China as a currency manipulator, he said. Overall, the Chinese currency is tightly controlled and mostly removed from market forces, Grassley said, adding that he wants the administration to bring a case against China’s currency manipulation at the World Trade Organization under article 15 of the General Agreement on Tariffs and Trade (GATT). “If the President continues to avoid acknowledging China’s currency manipulation and fails to address it in a meaningful way, Congress will have to act,” Grassley threatened.

Forex traders look for more details on E.U. bank stress test transparency – All the ballyhoo about the importance of the current European Union bank stress test and the transparency of test results may prove to be nothing but lofty rhetoric. July 23 is the test-result release date set by the Committee of European Banking Supervisors which said that 91 banks in various E.U. countries were under the microscope. The committee previously announced that test results would be released on an individual and aggregate basis. However, there has been ongoing bickering among national regulators about what information to release and when. To borrow a phrase, if regulators hold bank on transparency, online forex traders may wind up asking – “Where’s the beef?”