We presume the 'threat' of selling hundreds of billions of dollars of US Treasuries has prompted a softening in the "Currency manipulator" rhetoric from The US Treasuy department. Having previously said the Yuan is "significantly undervalued," today's report shifts the comment to stating that the Yuan is "below appropriate medium-term valuation." Of course, The US Treasury would know exactly how all of the world's currencies should trade in this centrally-planned world.

From "significantly undervalued"... then this happens...

and this...

And China meets with Obama and hey presto... Yuan is merely "below appropriate levels"

As Bloomberg reports,

The U.S. Treasury dropped its view that China’s currency is “significantly undervalued” while saying that forces driving appreciation in the longer term remain and China needs to allow such strengthening eventually.

The yuan remains “below its appropriate medium-term valuation,” the department said Monday in its semiannual report on foreign-exchange policies. The “core factors” that have driven the appreciation of the yuan in recent years remain in place, such as a large and growing current-account surplus, and net inflows of foreign direct investment, the Treasury said.

Even so, the department refrained from characterizing China’s currency as “significantly undervalued,” as it has in each foreign-exchange report since May 2012. The Treasury also recognized that “market factors are exerting downward pressure” on the yuan, though it called the trend “transitory.” The International Monetary Fund, by contrast, adopted the view in May that the yuan is “no longer undervalued.”

The U.S. softer line on China’s exchange-rate policy came in the first currency report by the Obama administration since the People’s Bank of China surprised markets on Aug. 11 with a devaluation that led to the yuan’s steepest two-day drop since 1994. The central bank said it would allow market forces to play a greater role in its daily setting of the yuan’s reference rate.

The Treasury said a test of the new regime will be whether China allows the yuan to “respond flexibly to appreciation as well as depreciation pressures.” It’s critical that China stick to its pledge only to intervene in currency markets when justified by “disorderly market conditions,” the department said.

The U.S. said China intervened “heavily” in the last three months, spending an estimated total of $229 billion to prevent the yuan from falling. China should regularly disclose its foreign-exchange interventions, the Treasury said.

Finally, US Treasury declined to label anyone a currency manipulator once again...

The department concluded in Monday’s report that no major trading partner met the threshold to be called a currency manipulator.

Not even Japan!!!