The pound to euro rate is 0.178% lower with 1 GBP = 1.1404 EUR. Pound euro climbed by another half a cent as concerns surrounding Greek budget cuts weigh on the euro. Tensions between Greece and the EU, the IMF and the ECB are causing serious market concerns. A disagreement has emerged over the need for Greece to make further budget cuts this year, but Greece is set to miss its deficit target by 1.5% of GDP. For those outside Greece, it really seems as though the country has not kept its side of the bargain. Friday’s UK construction figure showed a further slowdown and undershot forecasts, but the market took little note. The same is unlikely to be true of this morning’s UK services figure. A slowdown is expected, but the sector remains in fairly robust growth. This pair is trading at €1.14, and its upside may slow up today. Looking at the pound to dollar rate we see the pair also headed lower as poor US non-farm payrolls data contributed to a dollar-friendly, risk averse trading environment. US employment data was very disappointing last Friday; no jobs were added to the payrolls, the worst showing since October last year. This increased safe-haven flows into the US dollar, with US stocks erasing the week’s gains. In the longer-term, this is exactly the sort of figure that will convince the Fed to pull the trigger on QE3. At $1.6125, the pound dollar is trading half a cent lower than on Friday. Failing a further bounce in the EUR/USD pairing, there may be some further downside for this pair today, but beyond this we are sticking to our bet on dollar weakness.

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