Ahead of the 'phase one' trade deal signing in Washington, the US reversed its decision to brand China a 'currency manipulator'.
The US said that China had agreed to refrain from devaluing its currency to make its goods cheaper to foreigners.
In August 2019, after having repeatedly accused China of intentionally allowing the value of yuan to fall in order to give Chinese goods an edge over other countries, the Trump administration had labelled China a currency manipulator.
China had blamed the weakening of its currency on the market as investors were concerned about the escalation in the trade war between the two countries. The International Monetary Fund supported the statement and found the currency was valued fairly.
On Monday, US Treasury Secretary, Steven Mnuchin said, "China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability."
Washington also said that the value of the yuan had appreciated since August, at the height of the trade war, and that China had made "enforceable commitments" to refrain from devaluation as well as share more information on its exchange rates.
American and Chinese representatives will sign a 'phase one' deal on Wednesday in Washington that will promise billions of dollars' worth of US agricultural purchases and the reforms in technology transfer.