• China central bank advisor Li: Calls for stability in major currencies. Says reforms to global monetary system should be gradual
  • Yuan rises 0.51% vs dollar, biggest single day rise since July 2005 revaluation
  • IMF’s Vinals: Yuan is significantly undervalued. I would not say we have a currency war
  • Bank of France industry sentiment index 103 in October, up from 102 in September
  • French trade balance -4.683 bln in September
  • German final October CPI unchanged at +0.1% m/m, +1.3% y/y
  • UK September industrial output +0.4% m/m, in line with median forecast. Manufacturing output +0.1% m/m, slightly below median forecast of +0.2%
  • UK September global goods trade balance -£8.228 bln, slightly below median forecast of -£8.0 bln

Dollar has seen a fairly sharp reversal of fortunes today.

EUR/USD started around 1.3850, got as low as 1.3824, and is presently at 1.3940 having gotten as high as 1.3955. Worries over euro zone peripheries helped pressure EUR/USD early.

Talk of 1.3800 barrier interest (lower parameter of large 1.3800-1.4800 dnt) then lent some initial support. Reserve bank of Indian bought around 1.3850 and this was followed by strong buying from Middle Eastern names. This saw EUR/USD rally quickly over 1.3900.

BIS sold at various levels above 1.3900, but with general risk appetite improving (european stocks, gold up etc) the euro bulls were in the driving seat.

Cable up at 1.6170 from early 1.6115. Early dip saw Reserve Bank of India decent buyer below 1.6100. Hedge fund buying has also been noted.

USD/JPY little easier, down at 80.65 from early 80.95.

AUD/USD up at 1.0165 from early 1.0100 with talk of 1.0200 barrier interest now lying in wait.