ForexLive US wrap: Weak dollar early; firmer late. USD/JPY sets fresh record

Spain takes additional austerity/stimulus measures: to cut VAT on home purchases in half, trim union wages, shifts corporate tax calendar to accelerate revenues Fed's Dudley repeats he sees stronger US growth in second half of 2011 Fed's Pianalto: Weak growth warrants ZIRP through 2013 EU may push euro bonds over Germany's objections BOC's Carney:  Q2 growth seen flat to slightly negative Barclays: Sees next ECB hike pushed back to December 2012 from December 20011 prior forecast Merkel to CDU conference: No euro bonds ECB's Stark: Not our job to keep rates low to fund deficits; little inflation risk so long as economic performance is restrained; bond purchases buying time Sankei Shinbum: BOJ may ease further to weaken JPY S&P 500 falls 1.6% US 10 year not yields flat at 2.07% Gold closes at record $1855 after intraday high of $1877; oil flat at $82.50 EUR/USD rallied sharply in early US trade, breaking resistance at 1.4360 and triggering stops above that level. It surged as high as 1.4453 at mid-morning in NY on short-covering and on a rally in risk0assets but it soon lost momentum and turned south with stocks. It spent the US afternoon range-trading in the 1.4385/95 area. USD/JPY made a mad dash for stops and barriers at 76.25 and 76.00. We slumped as low as 74.94 very briefly before rebounding to 76.50 as if nothing had ever happened. Japanese press reports continue to suggest the BOJ will through a bit more QE at the strong JPY to try and turn the tide. Good luck with that... Cable rallied as high as 1.6617 after very consistent cable buying seen throughout much of the London session every hour on the hour. Once that order was filled, the slump began and we fell back to 1.6478, giving the pound the beating it so richly deserves. AUD traded risk-on in the morning and risk-off in the afternoon. It ends at 1.0405.  NY range: 1.0386/1.0479.