According to Bloomberg yesterday, the European Central Bank (ECB) have stated they will accept Greek government bonds within their asset swap program, regardless of the fact that the credit rating on those assets does not meet the stated requirements for the program. http://www.bloomberg.com/apps/news?pid=20602007&sid=aTAygysllnxM
On 4th March 2010 I said "I smell a back door bailout of Greece here". To my mind, the Bloomberg story above appears to confirm this theory. In which case, the ECB just lost itself the reputation for fiscal prudence it had enjoyed up until now, and the euro will not be rebounding against the Dollar any time soon.
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