By Omer Esiner of TravelexThe dollar fell to a one-week low against a basket of its major counterparts overnight, as moderating concerns about a Greek debt default buoyed investors' appetite for higher-yielding assets. The euro rebounded from a nine-and-a-half-month low against the dollar after sources in Athens reported that the Greek government would slash another 4.8 billion euros from its bloated budget to help bring its debt levels down to more manageable levels. The news of more painful spending cuts and tax increases increased the likelihood that Greece's EU partners would be willing to ante up their taxpayers' funds for a bailout. The single currency could enjoy more near-term gains from headlines that suggest an EU backstop for Greek debt is likely. However, the euro's upside should ultimately remain capped by skepticism about Athens' ability to implement its austerity plan and from the similarly dismal fiscal position of a number of other peripheral eurozone states. The pound got a boost from a huge jump in service-sector activity in February. The big increase in the service-sector PMI sparked short-covering in the pound, which has recently fallen to multimonth lows on mounting political uncertainty and the anemic nature of the U.K.'s economic recovery. EUR: The euro rebounded from lows against the greenback and Canadian dollar overnight, broadly supported by the latest headlines out of the eurozone that suggest additional painful budget reforms from Athens are in the pipeline. Sources announced that Greece's government will cut its budget by another 4.8 billion euros, half of that number coming from a reduction in civil servants' payments and the other half coming from a rise in the value-added tax. The news suggested that the painful budget reforms in Greece could make an EU bailout more palatable to taxpayers in Germany. The euro benefited from the reduction in worries about a possible debt default by Greece and could enjoy additional gains as news headlines suggest an EU or German backstop for Greek debt is likely. However, the Greek public's passion for protests and strikes makes the implementation of Athens' austerity plan very suspect. Similarly dire fiscal conditions in a number of eurozone peripheral nations will also keep the single currency's gains limited. Even if the possibility of a default in Greece, Spain or Portugal is taken off the table, the fiscal tightening needed to bring those nations' budget deficits down to within the EU's limits will undermine already anemic growth in the bloc and postpone any tightening by the European Central Bank.