Buoyed by healthy eco data out of France, the euro consolidated above 1.1750 level after five straight days of losses as traders awaited the US Trade Balance figures due 13:30 GMT.  According to Bloomberg the number is projected to print at -$61.5 Billion as higher oil prices and larger imports from China are expected to stretch the gap to record levels. With euro so grossly oversold and rioting in France appearing to subside, we would not be surprised to see a short covering bounce if US data produces an especially negative reading.

Meanwhile French manufacturing and industrial production data overnight  demonstrated the power of lower exchange rates as manufacturing increased 0.8% and  versus 0.5% expected. French GDP also showed a healthy rise jumping 0.7% vs. only 0.1% growth in the quarter prior. The pick in production should further support the euro bull's contention that ECB will raise rates at the December meeting and yesterdays hawkish comments by Webber went a long way in confirming that thesis.

On the other side of the world, the most interesting news came out from Australia and New Zealand as the two resource economies saw wildly diverging employment reports with Australia actually losing more than 19K jobs while New Zealand unemployment rate improved to only 3.4% from 3.7% expected. The Australian employment report showed the largest drop in full time jobs in 14 years suggesting that the country's booming growth spurred by huge commodity needs of China may be moderating materially. As a result the AUD/NZD cross dropped fully 80 points on the day, as capital flowed to the kiwi despite Alan Bollard's contention that the New Zealand dollar was vastly overvalued. With 7% yield and no sign of let up in the country's growth it is unlikely that the Central Bank will be able to stem the rise in the NZD especially if momentum traders decide to pile into the currency.

Boris Schlossberg is a Senior Currency Strategist at FXCM.