ForexLive US wrap: EFSF leverage chatter continues to build

CNBC: European plan to shore-up banks, buy sovereign debt via EFSF/EIB taking shape ECB's Mersch backpedals after earlier downplaying talk of ECB rate cuts Fed Governor Raskin: Further policy accommodation warranted ECB bond-buying slows to EUR 3.95 bn in latest week; total portfolio now EUR 156.5 bln US new home sales fall 2.3% in August ECB's Bini-Smaghi: Useful to have room for maneuver on monetary policy; EFSF will be used in innovate and efficient ways Barclays sees QE2 in UK starting in November Bundesbank's Weidmann decries moral hazard created by weakening bailout terms; Expects strong German growth in Q3;  downplays talk of rate cuts Germany's Schaeuble: No intention to increase EFSF; will be used efficiently S&P 500 rises 2.3% to 1163 US 10-year note yield rises 6.5 bp to 1.895% Gold recovers from intraday lows; closes 1.8% lower at $1625 EUR/USD traded in choppy fashion in the US, largely following the equity markets. We tumbled to 1.3414 lows on rumors that Apple had cut orders for its iconic Ipad device, taken a sign of a slowdown in global consumer demand. We later recouped intraday losses and closed at the highs of the day, up 2.3% on hopes that European policymakers will finally lever-up the EFSF, shoring up banks and buying sovereign debt in the process. The debate over EFSF leverage is likely to be long and loud, so there is still ample opportunity for policy discord before some watered-down half-measure is finally enacted. Getting Germany on board looks to be a major challenge, especially as the latest iteration of the EFSF has yet to pass the parliament. A sharp recovery in precious medals helped spur a recovery in the likes of AUD and CAD. Gold and silver end well off intraday lows of $1535.50 and $26.05 respectively to end at $1625 and $30.75.