The Asian session opened with a bout of risk-off flows, but sentiment improved gradually,producing a mixed picture. Initial caution was inspired Italy's ruling coalition.

The AUD rose on RBA Gov Lowe's comment that the Australian economy "may have reached a gentle turn" and knee jerked lower on a quickly downplayed mention of unconventional policy tools.

NZD was lifted by RBNZ Gov Orr's remark that the FX rate is competitive on an average basis, but looked through comments from RBNZ Dep Gov Bascand, who said that above potential growth is needed to boost inflation.

PBoC MPC member Ma said that the yuan can be kept stable. A slight beat in China's CPI was coupled with PPI entering deflationary territory.

Economic Events:

The week ends with several important releases. Before the ONS releases the UK's short-term monthly indicators at 0930 BST the publication of French industrial output at 0745 BST will be closely watched. Friday's main data event in the US is the publication of US producer price inflation at 1330 BST.

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