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All of a sudden the word on the streets is that EU finance minsters might have had a bit of a rethink and a bailout for Greece might be on the cards after all. And it seems to be a German-led attempt to put some sort of a hastily arranged package together, ahead of tomorrow's meeting of EU leaders.

Now call me an old cynic, but might it just be that the nice German finance minister has suddenly realised that it's German banks who are sitting on the largest proportion of Greek debt in Europe?

Talk of a rescue being mounted was enough to prompt some euro short-covering yesterday, but the single currency could easily be back under pressure by the end of the week unless EU leaders come up with something credible.

Even if a deal gets done, the wider implications for the euro are that this would potentially pave the way for Portugal to be next (but not last) to come knocking on the door.

This saga is far from over yet, about the only thing that looks certain is that more volatility lies ahead. Ultimately though, I'd say that the euro is going lower in the medium term, although a collective sigh of relief and further short covering should a bailout be launched could see it correct a little higher in the short-term.