ForexLive North American Wrap: Risk on Explosion

Euro's largest one-day gain since July 2010 ECB's Nowotny: Growth Slowdown Is An “Alarming Development” BOE's Miles: Q4 GDP could be flat Slovakia fails to ratify EFSF changes, talks to continue Asmussen: favors broad package including recapitalization German parliament recommends Asmussen for ECB Papandreou to meet with Van Rompuy on Thurs Nobel winner says euro needs fiscal union AUD, EUR lead; USD, JPY lag S&P 500 up 3.4% to 1194 Gold up 2.5% to 1677 Silver up 3.5% to $32.06 WTI up $2.83 to $85.81 Slow news day in North American with parts of US markets closed and Canada shuttered completely but low volumes didn't prevent a surge in risk assets after Merkel and Sarkozy pledged to deliver a plan to recapitalize banks by the end of the month. The news hit on the weekend but it was slowly digested in markets via a slow, steady rise in risk assets. In EUR/USD gains continued in excess of 300 pips to a high of 1.3698 shortly after the European close. It grew substantially quieter afterwards, and the pair drifted 60 pips from the highs. It was a similar story across FX as the USD and JPY tracked consistently and largely lower until the European close and then consolidated. AUD briefly touched above parity and most pairs threatened the tops of recent ranges but there were no definitive breakouts. As Gerry said earlier, USD/JPY remains comatose.