In a widely reported Bloomberg interview, US Treasury Secretary Tim Geithner said on Tuesday he sees "no risk" of a global currency war and wants to maximize incentives for China to allow its Yuan to rise in value. Reuters reports that he told the Charlie Rose Show in an interview that China would work against its basic development objectives if it kept its currency undervalued.
“I’m very confident over time that this is going to happen," he said of Chinese currency appreciation. "We just want to make sure it's happening at a gradual but still significant rate."
Unfortunately for Sec. Geithner, Congress and Japan are not likely to share that view.
Today, the Chinese announced a massive increase in their US dollar foreign currency reserves. The reserves increased $194 billion in September and now stand at $2.65 trillion according to the People's Bank of China. Also, China reported their September exports were the 2nd highest on record at $145 billion with a total trade surplus of $16.9 billion.