EUR/USD steadies as the dust settles

The noted reaction across the major currency markets earlier this morning saw the EUR/USD fall below the 1.05 handle after the reports of potential PBOC CNY devaluation were highlighted here. The low seen was set at 1.0488. Perhaps were it not for the proximity of the US CPI report later today, the reaction on the downside might have been greater? Well, that does kind of make sense, if the US CPI falls below forecasts, because under such circumstances, we would expect the Euro to spike higher. So, of course many short-term players probably do not want to get caught on the wrong side of the price action when that data hits the screens, at 1.30pm GMT. On the flip side of that, higher than forecast US CPI coupled with the prospect of a new currency war will not see the EUR/USD rest at 1.0488. Meantime, it has just banked a little higher, currently trading at 1.0510