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The template for positionalVariableBinding is: <xsl:template match="xqx:positionalVariableBinding"> <xsl:text> at </xsl:text> <xsl:call-template name="renderQName"/> </xsl:template> I believe that it should be: <xsl:template match="xqx:positionalVariableBinding"> <xsl:text> at </xsl:text> <xsl:value-of select="$DOLLAR"/> <xsl:call-template name="renderQName"/> </xsl:template>
Indeed, it should be. I've made the change that you suggest and marked the bug FIXED. If this satisfies your comment, please mark it CLOSED.