China raises reserve requirements 50 bps (correction)

EUR/USD down at 1.3680. AUD/USD down at .9835.

I’m saying nothing about a certain newswire. Sheesh. It is reserve requirements not interest rates.

UPDATE: EUR/USD recovers, back at 1.3695.

There had been alot of talk this week that China would hike interest rates 25 bps today. A wire service put up a headline saying that China had raised interest rates 50 bps, more than expected. Hence the dollar advance.

It was infact incorrect and the wire service quickly corrected their error to only reserve requirements (a much milder form of monetary tightening) Hence the subsequent dollar decline.