The losses were mild though and as US stocks reversed direction from highs, the USD strengthened. With little economic data yesterday, focus turned to weak earning outlooks and the Dow slipped up to 800 points from highs. The latest banking crisis bailout news concerned the US treasury's $250bn capital injection into the banking system.
The pound made large gains yesterday pushing the recovery enveloped further as it tracked the EUR higher and took advantage of the weaker USD. In a sign of the very illiquid conditions in the FX markets, when the US equities reversed, the GBP crumbled. CPI was slightly stronger than expected at 5.2%Y/Y rate. Overall the GDP/USD traded with a low of 1.7394 and a high of 1.7629 before closing the day at 1.7400.
The Euro gained as Oil and stocks surged during the Asian and European sessions. A very weak German ZEW survey in October was largely ignored because it took place mainly last week during the stock crash.