British pound sterling: The outlook for tomorrow dominated by the Service Sector PMI reading

A look at the bellweather currency pairs we follow shows:

The pound euro exchange rate is 0.1 pct in the red at 1.1707.
The pound US dollar exchange rate is 0.24 pct in the red at 1.5284.
The pound Australian dollar exchange rate is a percent higher at 1.5851.

NB: These are spot market rates, your bank will affix their own discretionary spread to the figures. However, an independent FX provider will guarantee to beat your bank's offer, thus delivering you more currency. Please find out more here.

Turning to the outlook for tomorrow it is once again the turn of the British Retail Consortium to get the ball rolling for a busy day of data tomorrow; this time it is the release of

The BRC Shop Price Index which measures price changes in the popular retail outlets in the UK.

The changes in the SPI are widely followed as an indicator for inflationary pressures. A high reading is seen as positive (or bullish) for the GBP. However; this data release is likely to have very limited impact on sterling.

At 8 AM we have the Halifax House Price Index which should shed some light on house price moves.

Consensus are for prices to have risen 2.5 pct Year on Year in May.

The big data event though is the PMI Service Sector data released by both the Chartered Institute of Purchasing & Supply and the Markit Economics.

This week's PMI data releases have all surprised to the upside which has provided support for GBP.

Can the services sector follow suit?

Consensus expectations are for a rather robust reading of 53; we would suggest the risks are to the downside tomorrow - any miss will trigger a deeper correction in the pound sterling.