EUR/USD rallying on the news, now at 1.4290.

Not good news, really. Basically means the ECB will accept a half-drunk bottle of Port as a collateral. The ECB is basically giving the ratings agencies the finger and accepting reality, that it must lend against euro area government bonds or domestic banks will collapse.

For whatever reason, Trichet says “selective default” by the ratings agencies must be avoided, a contradiction the press has already jumped on.