The US Treasury, in its twice-yearly report to Congress on exchange rates and trade, stopped short on Tuesday of accusing China of currency manipulation but made clear it expected revaluation within six months.

The conclusions sparked an angry reaction from those legislators who have lost patience with the Treasury's gentle diplomacy on China's exchange rate. The report, however, marked a clear hardening by the administration. It said: “If current trends continue without substantial alteration, China's policies will likely meet the statute's technical requirements for designation [for currency manipulation].”