Chinese Vice Premier Liu He (2nd L) says goodbye to U.S. Treasury Secretary Steven Mnuchin as they break from meetings at the USTR offices May 10, 2019 in Washington, DC.

The United States removed China from a list of countries considered currency manipulators just two days before top trade negotiators for Washington and Beijing sign a key "phase one" trade deal, the Treasury Department announced Monday.

The decision to strike China from the currency manipulator list comes more than five months after the Treasury Department formally made the designation. President Donald Trump and China Vice Premier Liu He are scheduled to sign a preliminary trade agreement in Washington on Wednesday.

China is now on a "monitoring list" for currency practices along with nine other countries, including Germany, Italy and Japan.

"The Treasury Department has helped secure a significant Phase One agreement with China that will lead to greater economic growth and opportunity for American workers and businesses," Treasury Secretary Steven Mnuchin said in a statement. "China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability."

CNBC reported earlier on Monday that the U.S. would make the move, citing a person familiar with the matter. The S&P 500 rose to a record high after reports from that the Treasury Department will no longer list China as a manipulator.

The world's two largest economies for nearly two years have been levying tariffs back and forth while trying to work out the terms of a permanent trade resolution. Trump, in particular, has been critical of the U.S.-China trade deficit as well as Beijing's previous moves to devalue its currency, which tends to boost its exports.

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Treasury's move in August to call China a manipulator raised tensions in the trade war and was the first such formal designation since President Bill Clinton's administration. It came as the Chinese yuan weakened beyond 7 yuan to the dollar for the first time since 2008.

China's central bank governor, Yi Gang, maintained at the time that Beijing doesn't use its currency as a tool to cope with external disturbances such as trade disputes. The yuan has since returned to a pegged range considered normal — in line with China's economic fundamentals and market demand and supply, and not weak enough to anger its trading partners.

And while largely symbolic, the Treasury Department's summertime decision to label China as a manipulator could have left Beijing open to additional scrutiny through the IMF.

The president's decision to remove China from the list drew criticism from the Senate's top Democrat, New York's Chuck Schumer.

"China is a currency manipulator — that is a fact," Schumer said in a statement. "Unfortunately, President Trump would rather cave to President Xi than stay tough on China. When it comes to the president's stance on China, Americans are getting a lot of show and very little results."

Washington's move to strike China as a currency manipulator comes two days ahead of the hotly anticipated phase one trade deal signing between the two nations.

Treasury Secretary Steven Mnuchin in an interview with Fox News on Sunday reiterated the importance of the pending deal and said that Beijing has agreed to purchase some $200 billion in U.S. goods over the next two years.