The story of the current account deficit allowed traders and analysts to justify any currency prices. Sentiment got overly bearish on the dollar.

We need to see imports soften off if we are ever going to solve the current account deficit problem. That's why we've seen the currency respond to the wider deficit. It's worrying that the current account deficit will stay large.

These imbalances, reflect in part in the rising US deficit as well as the massive surplus in China's current account, pose a threat to international trading relationships upon which much of the recent global prosperity has been built.

Sometimes, if a country's currency is overvalued in real terms, and it looks like the current account is going to be in deficit for the foreseeable future, devaluation can make sense.

The market is misreading and misunderstanding the story. The story is the capital account, not, I repeat not, the current account.

Traders are not being overly quick to get into long positions as the oil price moves up, but are quick to unload if they see any weakness.