With the start of the European session, the euro and the sterling pound started the session weak, trading with slight gains against the U.S. dollar, correcting some of the losses incurred in the previous session when the return of Europe triggered a huge sell-off wave, sending high yielding currencies and other commodities to the downside on fears the pace of recovery in the world's largest economy is easing.

However, during the session the European common currency and the sterling pound extended the gains, supported by the positivity of the Greek decision of holding the general election on May 6, where the proposed election is expected to replace the current coalition technocratic government with a fully elected cabinet and government, Officials told Reuters.

The Italian government auctioned short-term bonds today, where the nation saw borrowing costs rising again, spreading fears and worries across the region Spain and Italy are the next victims of the debt-trap, where both nations are expected to follow Greece, Ireland and Portugal into deep crisis unless lawmakers intervene and curb the tension in the debt market with some new measures.

Optimism returned to the common currency after the European Central Bank Executive Board member, Benoit Coeure, clarified that the European Central Bank might revive the bond-purchase program to prevent rising borrowing costs from pressuring Spain into seeking bailouts as other indebted nations previously did.

Coeure said at an event in Paris today that market conditions are not justified, adding will the ECB intervene? We have an instrument, the securities markets program, which hasn't been used recently but it still exists.

The remarks made by the ECB member eased tension and supported markets to rebound on speculation the European Central Bank will intervene to control rising yielding on Spanish bonds, where an earlier move might shield Spain and other highly indebted nations such as Italy from following other weak nations into deep crisis and therefore asking for bailouts.

The Euro appreciated against the greenback recording the highest at $1.3165 after reaching a low of $1.3065, noting that the EUR/USD pair started the session at $1.3079 and trades in the moment around $1.3120.

The royal currencies inclined as well, following the sentiment in the euro-area region, where the GBP/USD pair trade in the moment around $1.5915, compared with the opening level of $1.5861. The pair reached so far the highest at $1.5938 and the lowest at $1.5851.

On the other hand, the U.S. dollar index (USDIX), which tracks the dollar's movement against other six major currencies, reversed sharply to the downside, reaching so far a low of 79.52, compared with the opening of 79.83. The index is currently hovering around 79.57.