China Buying Billions of Euros, Yet For How Long?

From the Wall Street Journal:

China's deep pockets are momentarily keeping the euro supported.

But with Greece's financial future still uncertain even after lawmakers passed an austerity package on Wednesday, and the single currency's long-term prospects far from assured, Beijing risks learning a lesson about trying to fight a market more inclined to sell than buy.

For months, whispers of "Asian official buying" have permeated markets when the euro fell below certain levels. That talk has kept euro/dollar hemmed into a tight seven-cent range since late May, even as fears of a Greek default make traders disinclined to hold the single currency.

China, the world's biggest holder of foreign-exchange reserves, has pledged financial support to the distressed euro-zone periphery while touting its economic links to Europe.

http://online.wsj.com/article/BT-CO-20110629-715034.html