The U.S. Treasury said no major trading partner is manipulating its currency to gain an advantage in trade, while lauding China for acting to avoid a "disorderly" depreciation and then allowing the yuan to rise against the dollar this year.

"The Chinese currency has moved recently in a direction that would help correct the bilateral trade imbalance with the United States," according to the Treasury's twice-a-year foreign currency report released Tuesday in Washington. "But on a trade-weighted basis, the currency has become more competitive globally" amid a weakening greenback.

President Donald Trump's campaign rhetoric over China's trade practices and America's roughly $350 billion merchandise-trade deficit with the country has softened as the two nations try to forge cooperation on addressing the threat of North Korea. Trump—who has backed away from a campaign promise to label the world's second-largest economy a currency manipulator—is scheduled to meet with President Xi Jinping in China next month.