• OECD (Organization for Economic Coordination and Development)  chief Gurria welcomes the recent Chinese yuan reforms and says it has removed an element of rigidity in the global financial system.
• No double dip in Europe or globally
• EUR exchange rate reflects an economically more reasonable balance”
• Germany and Britain have given powerful signals on fiscal consolidation

• Euro at $1.20 much better than $1.50, may fall further but will nowt solve Europe’s problems

• Weaker euro in short-term is good news for euro zone economy
• No risk of double dip recession in euro zone
• Gradual yuan rise desireable

Comments, especially headline one, have helped fuel EUR/USD slide, presently down at 1.2263.

OECD Secretary General Gurria says Greece deserves to be helped given the austerity package, saying the package is strong and ambitious. Euro zone finance ministers should give a clear, strong signal of support for Greece. Going to the IMF should not be a taboo for Greece, he says, and Greece must show results to restore confidence.

EUR/USD is unmoved on the comments, awaiting comments from the EcoFin later this afternoon on the Greek matter. We trade at 1.3662/64.

UPDATE: The OECD upgrades its global GDP forecast for 2010 to 4.0/4.5% from its 3.4% forecast made in November.

It is too early to withdraw stimulus, they say, but not too early to signal exit strategies.

“A frequently reliable indicator of turning points in economies throughout the world.”  Well, let’s just keep our fingers crossed it’s reliable this time round.

• Greek situation is under control
• Central banks should keep interest rates at zero for the best part of 2010.

EUR/USD marginally firmer at 1.3970 in fairly listless trade.

OECD sees

• 2009 GDP in OECD area -3.5%, +1.9% in 2010, +2.5% in 2011
• Assumes Fed, ECB rates on hold until “close to end 2010″
• 2009 World GDP -1.7%, +3.4% in 2010, +3.7% in 2011
• BOJ rates should stay on hold through 2010 and 2011 due to deflation
• 2009 Euro area GDP -4.0%, +0.9% in 2010, +1.7% in 2011
• BOE rates “normalisation will probably need to start in 2011″
• 2009 U.S. GDP -2.5%, +2.5% in 2010, +2.8% in 2011
• 2009 UK GDP -4.7%, +1.2% in 2010, +2.2% in 2011
• 2009 Japan GDP -5.3%, +1.8% in 2010, +2.0% in 2011

Other snippets

• Due to debt rise, fiscal consolidation vital but not at pace that undermines recovery
• Risk of disorderly exchange rate adjustment cannot be ruled out

Comments from OECD’s chief economist

• Low inflation means China has no urgent need to shift yuan policy
• China’s need to change policy “prospective rather than acute”
• World trade growth will help euro zone even if strong euro hits competitiveness
• Part of recent dollar weakness due to loss of “safe haven” effect
• OECD’s world trade growth forecasts might be on conservative side (SEE, HE’S ALREADY TELLING YOU THEY’RE PROBABLY WRONG)

10:00 GMT: OECD Economic outlook for major world economies

11:00 GMT: Bundesbank November monthly report

16:00 GMT: ECB’s Trichet gives speech in Paris entitled “Is there still a paradigm for monetary policy today.”

19:00 GMT: ECB’s Gonzalez-Paramo gives speech in Berlin

The economic outlook for the OECD area improved further in June, the composite leading indicator rising to 95.7 from 94.5 in June.

OECD sees stronger signs that the downturn in the U.S., U.K., Germany and Canada has found a trough.

OECD sees stronger signs of recovery in France and Italy and tentative signs of improvement in Japan.

Regarding the leading emerging economies. OECD feels China and India may also have hit the bottom, and there are tentaitive signs that the lowest point before recovery may also have been reached in Brazil and Russia.

OECD official Gurria says his group does not see any danger of deflation in the euro zone.

EUR/USD is firming ahead of the ADP report, making a new high at 1.4094. 1.4150 is next resistance of note for EUR/USD.

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