Currencies are mixed and fluctuating heavily ahead of major political decisions from Italy and Greece and also ahead of the inflation data from the world's largest economy, where the Italian Premier is to announce his new government, while the Greek parliament is to vote on the new government formation made by Lucas Papademos.

Markets rebounded to the upside after the European Central Bank bought Italian and Spanish 10-year bonds according to unidentified sources, which in result supported the bonds to gain value, while pressured yields slightly to the downside, easing rising jitters and debt-concerns that rising yields could prevent European indebted nations from accessing the capital market, and even though they were able to access the capital market, they would loose control over the rising amount of debt they handle.

But on the other hand, markets are weighing the steps taken by Italy and Greece positively; however, with high level of caution, where Greece is to announce the new government led by Papademos, who is expected to lead the country towards the frozen tranche of 2010's bailout package and also towards the second aid deal, while Italy accelerated the implementation of the austerity measures and now all eyes are focused on the Italian Premier, Mario Monti and on the new technocrat government.

The U.S dollar index (USDIX), which tracks the dollar's movement against other major currencies, opened the session in Asia at 77.89 and fluctuated heavily between the high of 78.39 and the low of 77.82, while is trading in the moment at 78.11.

Moreover, the euro lost strength against the green back today, where after the opening of 1.3538, the pair reversed to the downside reaching the lowest at 1.3428, but then rebounded to the upside reaching a high of 1.3556 on news that the European Central Bank is buying European indebted nations' bonds. The EUR/USD pair is trading in the moment at 1.3491.

The sterling pound fluctuated heavily against majors, yet lost some strength against the strengthening U.S. dollar after the monthly jobs report from the United Kingdom, which showed that ILO unemployment rate climbed to 8.3%, the highest in 15 years, from 8.1%.

Furthermore, the claimant count rate lingered at 5.0% in line with the previous reading, yet better than expectations, while the change in jobless claims came at 5.3 thousands jobs better than the previous and the expected 13.4 thousands and 21.0 thousands respectively, adding more volatility to the royal currency.

The sterling pound declined against the U.S. dollar to currently trade around 1.5796, after moving sharply between the highest level at 1.5826 and the lowest level at 1.5744, noting that the GBP/USD pair opened the session in Asia at 1.5818.