The weakness in the yuan followed a rise in the US dollar overnight after the European Central Bank decided to extend its debt-buying programme even as it cut the monthly amount.
Draghi is giving more of less, and lots of it. However, the clear the key message is 'no taper', says Nick Parson of National Australian Bank.
The ECB said it would cut monthly purchases to 60 billion euros from the current 80 billion euros but extend the buys until the end of 2017. Markets had expected purchases to stay at 80 billion but only for 6 more months, suggesting a compromise between hawks and doves in the Governing Council.
Renzi's defeat deals a body blow to the European Union already reeling under anti-establishment anger that led to the shock exit of UK from the club in June this year.
Italian prime minister Matteo Renzi resigned after suffering a heavy defeat in a referendum over his plan to reform the constitution.
ECB President Mario Draghi said on Wednesday the bank will look at a combination of policy tools when it meets on December 8 and that ultra-easy monetary policy has given governments in the region time for reforms. Those efforts need to be stepped up, he said.
OPEC oil producers are preparing for a crucial meeting on Wednesday where they aim to agree on a production cut. However, oil prices are trading lower as investors doubt that a deal will be reached. On Monday, OPEC technical teams reportedly failed to agree on any details for the proposed cuts.
The ECB has bought more than a trillion euros (USD 1.06 trillion) of euro zone government bonds in a bid to shore up economic growth and inflation in the euro zone. For the most part the bank is holding these bonds.
Speaking publicly and behind the scenes, ECB officials emphasise any U.S. shift towards protectionism under Trump could hurt the already fragile euro zone economy and pave the way for an even stronger backlash against globalisation and the euro project.
Mersch also warned that the prospect of relaxed fiscal and monetary policies around the world, along with more lenient regulation, as advocated by US President-elect Donald Trump, risked a new financial crisis.
Spot gold was little changed at USD 1,268.31 per ounce at 0111 GMT. The safe-haven asset is up about 0.2 percent so far this week.
The upturn in both activity and prices will make welcome reading for policymakers at the European Central Bank, who left their ultra-loose policy unchanged last Thursday but kept the door open to more stimulus in December.
The dollar index was a beneficiary of the euro's slide which occurred in reaction to ECB President Mario Draghi's refusal to given any legs to recent speculation policymakers may opt to begin tapering of the bank's 1.7 trillion-euro asset purchase program in the near-term.
Once again, the People's Bank of China (PBOC) faces the same problem of too many banks relying on short-term borrowing. But this time, the central bank appears to be deflating the risk with less drama having learnt some lessons from its intervention in 2013.
Keeping interest rates and an 80-billion-euro per month bond buying programme unchanged, ECB President Mario Draghi will likely emphasize the continued need for monetary stimulus, reinforcing expectations for an extension of the ECB's asset buys beyond its scheduled end next March.
Banks stopped easing credit standards for enterprises in the three months to September and a narrow majority of them expects to tighten them in the current quarter, the ECB's lending survey showed.
The European Central Bank (ECB), for example, back in September 2014 was projecting headline inflation of 1.4 percent for the euro zone in 2016. Since then, that figure has come down to 0.2 percent last month. But the downward trend, which observers have become accustomed to, seems to be about to change.
China will also be in spotlight in the coming week, reporting third quarter GDP figures on Wednesday, with data likely showing steady growth at 6.7 percent, as increased budget spending and a property boom offset stubbornly weak exports.
The ECB has spent over a trillion dollars buying bonds in an effort to boost inflation, a key gauge of economic growth. But inflation rates remain just above zero and are not expected to reach the ECB target for at least two years.
India‘s macro story looks very good, says Sanjeev Prasad of Kotak Institutional Equities. Speaking to CNBC-TV18 Prasad said that global events are hard to predict.
Although Diego Parrilla thinks gold prices should stay contained in the short-term, down the track he envisages a "perfect storm" investment thesis that could ultimately end with asymmetric upside for the precious metal.
During the event, Nowotny described as overblown warnings by some critics that the euro could fail as a currency, and said the problems were with certain member states.
With ECB rates now well into negative territory, the potential for detrimental side effects are increasing as they cut into banking profitability and raise the risk of asset bubbles and market distortions, the policymakers said.
Global growth will motor along but the recovery will be gradual and uneven with heightened uncertainty, even as the United States, the world's biggest economy, is expected to recover, the ECB said in a regular economic bulletin.
The week will start with macroeconomic data - July industrial output and retail inflation (CPI) that will be announced on September 12 and WPI on September 14.