Major currencies rebounded to the upside, after the huge losses incurred yesterday against the U.S. dollar, where investors are demanding high yielding currencies after Italy eased pressures and market tension by accelerating the implementation process of the austerity measures; in addition, talks are taking place to replace Berlusconi with the former European commissioner Mario Monti as well as early elections.

On the other hand, the U.S. dollar reversed to the downside cutting some of the huge gains recorded in the past session, where investors tended to avert bearing risk and demanded the dollar excessively; however, today we can see optimism dominated the market, after the Italy started to take serious steps to avert falling in the debt-trap as Greece did.

The U.S. dollar index (USDIX) opened the session at 77.90 and recorded the highest at 78.16, but then reversed sharply to the downside reaching a low of 77.43, while the index trade now around 77.47.

The euro rebounded to the upside against the greenback recovering some of the losses seen yesterday, especially after tensions eased in Europe, which is the main focus in the market, where investors track all movements and comments from lawmakers in Europe, especially when the debt crisis in deepening and now expectations indicate that the euro zone, in case leaders didn't tackle the debt crisis, will go into deep recession, while growth will slow further alongside faltering recovery.

The euro declined sharply earlier after the European Commission lowered growth forecasts for the euro zone, where the Commission cut growth of 2011 to 1.5% and to 0.5% in 2012, while the Commission expects that GDP figures to improve by 1.3% in 2013.

Moreover, Greece was able to solve the political conflict among the parties and assigned new Prime Minister to replace the former George Papandreou, where Lucas Papademos, the former European Central Bank Vice President became the new Greek Premier, and now all the lights are focused on the Greek new government to provide written acceptance for the second bailout deal in order to obtain the sixth tranche of 2010's aid package which is needed for Greece to avert an early default.

The EUR/USD pair opened the session in Asia at $1.3538, and recorded the highest at $1.3643 and the lowest at $1.3483, and is currently hovering around $1.3620.

The sterling pound also gained strength against the weakening U.S. dollar, especially after the Bank of England kept rates steady at 0.5%, while asset purchases quantity lingered at 275 billion pounds.

The GBP/USD pair started the session today at $1.5907, and recorded the highest at $1.5965 and the lowest at $1.5890, and is currently hovering around $1.5955, recovering slightly from the losses seen in the past session.