Some upbeat economic data out of the US and a rebound in Chinese shares helped ease market tension today. Volatility measures including the VIX and Euro VIX (EVC) dropped off considerably as risk aversion fell back to more orderly levels.
Disappointment on US consumer inflation figures helped GBP/USD to pick up momentum midway through the session and lift up to 1.5653. Support was found around 1.5637 but there was no real drive to push any higher ahead of the release of the FOMC minutes.
The Australian dollar was under pressure again following a selloff in Chinese equities. The Shanghai composite dropped a further six percent on Tuesday – adding to the fall of over thirty percent that’s taken place since the summer.
The Australian dollar suffered a strong downward correction today, most considerably against the US dollar. The move came after China announced it would lower the level at which the yuan trades against the greenback.