USD -  However, when analyzed further, the business spending component of the index was lower than expected, with the improvement largely led by aircraft and military purchases - two sectors heavily funded by the government. With public spending cuts expected in the months ahead, today's number are likely not an accurate forward-looking gauge of economic growth. Meanwhile, weekly jobless claims fell by more than expected to 353K from last week's 388K. Nevertheless, investors are betting that more than one week of improving numbers will be needed to keep the Fed from easing monetary policy further.

EUR - The euro rose sharply in early trading after ECB President Draghi demonstrated just how influential his remarks can be. Speaking at a global investment conference in London, Draghi sparked the rally after saying that "within [its] mandate, the ECB is ready to do whatever it takes to preserve the euro." The comments instantly sent sovereign debt yields in troubled Spain and Italy tumbling with their 10-Yr notes falling to 6.94% and 6.08% respectively as investors expect the central bank will soon buy sovereign debt directly. However, the last time the Bank bought debt directly it was met with stiff opposition from the EU's core economies. Moreover, the comments are not out of character for Draghi, having stoked expectations of further debt purchases in the past with no follow through. Nevertheless, signs that the ECB will be proactive going forward are providing at the minimum a brief reprieve for the common currency. Meanwhile, Greece's international creditors met with the finance ministry to assess the progress, or lack thereof, that's been made towards meeting fiscal consolidation goals.

GBP - Sterling is sharply higher this morning on growing optimism that European leaders are considering further stimulus measures. As the main destination for British exports, a rebound in the mainland European economies would help bring the UK out of recession. The pound has thus rallied nearly 1.5% against the USD - the biggest gain in nearly 10 months. However, the pound will likely remain relegated to its recent broad ranges ahead of a BoE meeting next week.

JPY - The yen is lower against all of its major counterparts as surging stocks and commodities encourages investors to seek higher yields. Most notably, the yen reversed its weekly gains against the EUR after ECB President Draghi's comments stemmed demand for the JPY's perceived safety. Japanese officials are surely pleased with the recent weakness, but losses will likely be contained as today's initial risk-on rally moderates.

Commodity Currencies - The high-yielding commodity linked currencies are broadly stronger this morning as investor risk appetite rebounds. Raw goods are in the black with oil rising back above $89/bbl, gold gaining to $1613/oz, and copper up to $339/lb. The CAD extended its recent gains, rising to its strongest level against the USD since May. With nearly every other G10 central bank considering steps to ease monetary policy, the BoC stands alone with its hawkish bias. Meanwhile, the AUD and NZD are both near their annual highs as investors are increasingly attracted by their relatively high interest rates and Australia and New Zealand's AAA credit rating. The RBNZ kicked off a round of global central bank meetings scheduled for the next two weeks, keeping interest rates on hold after citing more resilient economic growth than expected. However, it was the ZAR and MXN that posted the largest gains overnight as further stimulus measures from both the Fed and ECB will support demand for Mexican and S. African exports.