The pound to euro rate is 0.174% higher with 1 GBP = 1.1634 EUR. The pound to dollar rate is 0.076% lower with 1 GBP = 1.5851 USD. The British pound climbed to a six month high against the euro as markets speculated about a Greek default. "German officials are debating how to shore up German banks in the event that Greece fails to meet the budget-cutting terms of its aid package, which would prevent it from receiving the next bailout payment," says a note from Richard Driver at UK money transfer company Caxton Fx. Adding to the euro's woes are rumours that BNP Paribas, Societe Generale and Credit Agricole, France’s three largest banks, may have their credit ratings cut by Moody’s as soon as this week because of their exposure to Greek sovereign debt. "The single currency also took a hit from claims that Jurgen Stark, an influential European Central Bank member, tendered his resignation due to differences over how the central bank should deal with the debt crisis," says the note from the money transfer company. Investors are now fleeing to safe haven currencies, driving the yen to a 10 year high against the euro and a two and a half year high against the pound. With little economic data due today, exchange rates are likely to continue to be driven by market speculation. Looking at the pound to dollar we see that the British pound fell to a seven month low against the US dollar, as safe haven currencies were supported by growing risk aversion. Sterling lost further ground against the US dollar over the weekend, touching a seven month low as the greenback gained support from safe haven demand. There is growing speculation that Greece is on the brink of default, which is encouraging investors to buy into safe haven currencies, particularly the Japanese yen and the US dollar. Risk appetite was also undermined by the news that Jurgen Stark, a key ECB official, tendered his resignation in despair over the ECB’s policy of buying government bonds.

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