The current XQuery 1.1 Working Draft discusses the static type inferred for external variables:

  If a variable declaration includes a type, that type is added to the
  static context as the type of the variable. If a variable
  declaration includes a VarValue or a VarDefaultValue but not an
  explicit type, the type of the variable is inferred from static
  analysis of the expression and is added to the static context.

Doesn't this belong in the Formal Semantics?

We do need to know what the required type of an external variable is. At the last Face to Face, we decided the following:

- Static type has no dependency on external

- In a dynamic implementation, the static type is either (1) the
  declared type, or (2) item()*

- The original paragraph cited in 2008Oct/0002.html is only true when
  there is no external variable.

- Editorially, bringing the two descriptions of the types of external
  variables closer together, and giving them similar structure, would
  be helpful.

- Wording: 'the variable contains external' - be clear that this is
  syntactic productions.