The euro started to recover some of the early losses and stocks rebounded on lows as investors found relief in reports suggesting that Italian Prime Minister Silvio Berlusconi will resign.

The market saw the news as a source of comfort as the problems in Italy are worsening due to his lack of support and new leadership by get the papers in order.

A report from Reuters cited close people to the prime minister saying that he could resign as soon as today ahead of a parliament voter tomorrow on the amended budget.