Risk sentiment in better nick today. Shanghai share index finished up 1.5% and S&P presently up about 6 points. Nothing major, but a welcome relief from yesterday’s heavy losses.

Against this backdrop JPY and USD generally weaker.

EUR/USD sits at 1.4120 compared to an opening around 1.4100. Russian, Asian central bank buying lifted the pairing early, underpinned by better equities. Sources touted sell orders lined up at 1.4140 up through 1.4160.

The release of much stronger than expected ZEW German economic sentiment reading (see above) lifted the pairing to a session high 1.4154 before stalling out, the euro pulls unable to swallow the aforementioned ready supply at 1.4140/60.

Funnily enough given the Asian central bank buying noted earlier, there was also talk of Asian central bank sales up around the highs. Most probably different banks. Sources note buy stops gathering just above 1.4160.

Cable has made good gains this morning, with sterling seeing across the board strength. Cable was pushed higher early, with Russian, Asian central bank buying noted. Having started around 1.6340 the pairing got above 1.6400 very quickly. There it ran slap bang into good middle east selling interest which curtailed it’s gains for awhile.

The release of much stronger than expected CPI data (see above) got things going again and that combined with the stronger than expected ZEW data sent cable flying up to a session high 1.6467. We’ve since drifted lower, presently at 1.6445.

EUR/GBP has traded lower, presently at .8585 from an early .8625. The stronger than expected CPI data has some surmising UK rates will be headed higher sooner than originally thought.

USD/JPY has moved higher, presently up at 95.15 from an early 94.85, the JPY underminned by the improved risk sentiment. Sources note Japanese exporter sell orders lined up at 95.20 up through to 95.50, and they have helped cap the rally at a 95.28 session high.