The euro rebounded today against the dollar as slight wave of optimism spread in the market on news that the European Union considers expanding the European Financial Stability Facility capacity, where the economic and monetary affairs commissioner, Olli Rehn said that the euro zone could leverage the bailout funds for the European Financial Stability Facility in order to support euro countries and to prevent the contagion risk.

Moreover, the German Chancellor, Angela Merkel said on ARD television yesterday that implementing the agreement on expanding the European Financial Stability Facility is necessary to aid Greece and prevent the crisis from spreading to other countries in the zone.

On the other hand, the common currency could fluctuate heavily during this week as the euro zone faces heavy political decisions from Parliaments in Germany, Finland and Slovenia on expanding the European Financial Stability Facility role according to the July 21 summit decisions.

The main focus remain on Germany especially after academics and politicians head to court seeking to prevent the country from raising bailouts for other countries within the zone as they claimed that German participation in bailouts undermines the parliament's budgetary rights and contradicts the democratic representation along with the protection of property.

The single currency rebounded to the upside against the dollar after reaching a low of 1.3360 to currently trade around the opening level of 1.3519; the EUR/USD pair also set the highest at 1.3549.

On the other hand, the dollar index (USDIX), reversed to the downside affected by the strengthening common currency, the sterling pound and the Japanese yen. The U.S. dollar opened the session today at 78.11, and then advanced to a high of 78.85; however, the index reversed then to currently trade around 78.08 after recording a low of 77.98.

Concerning the GBP/USD, the pair advanced today after opening the session at 1.5471, recording a high of 1.5541, however, the pair fluctuated heavily and reached a low of 1.5430 and is currently trading around 1.5526.

Moreover, the Japanese Yen gained strength against the U.S. dollar, where the USD/JPY pair reached a high of 76.75 after opening the session at 76.50, nevertheless declined to a low of 76.20 and is currently hovering around 76.29.