Highlights:

@ 11:27: RBS see today's data as a 'dramatic development' 
@ 9:30: GBP heads higher as UK services sector shines 

17:24: Outlook for the British pound on Thursday the 6th

 The British pound sterling (Currency:GBP) has benefited from some positive data releases over the course of the first week of June with all three PMI data releases beating expectations.

Today's Services data was particularly good - setting the tone for further GBP gains this week.

Tomorrow we have another key event - the Interest Rate Decision and Asset Purchase Facility decision is announced by the Bank of England.

Find out what is expected here.

15:33: Where does the momentum lie?

 We have just issued a host of articles concerning the outlook for the British pound based on short-term and medium-term momentum. Please click on your pair below:
GBP vs South African Rand
GBP vs Australian dollar
GBP vs US dollar
GBP vs New Zealand dollar
GBP vs Euro

12:39: Sterling will still be hindered by the unknown that is Carney

Earlier we posted a sterling-positive viewpoint suggesting incoming Bank of England Governor Carney is unlikely to execute any GBP-negative moves when he takes over.

However, Andy Scott at foreign currency exchange brokers HiFX believes that despite today's strong economic showing it must be remembered that Carney is still, essentially, an unknown quantity:

"The UK economy seems to be holding its own despite the terrible shape of the eurozone, its largest trading partner and Sterling should benefit against the single currency as a result. However, there still remains the risk that under its new Governor next month, the Bank of England decide to try and turbo charge the meagre economic growth being seen at the moment with more monetary easing.

"This unknown will continue to limit sterling’s upside due the risk of sterling dropping due to such central bank action. There’s even been some calls recently that Mr Carney could look to significantly weaken sterling in an effort to boost exports but we feel this to be unlikely."

11:27: Why today's Services PMI data is so important for the pound sterling

Ross Walker at RBS tells us that today's strong showing by the service sector is a 'dramatic development' -

"The key conclusion from the May services PMI survey is that these numbers bolster significantly the chances of solid services output growth in Q2.
"An acceleration in UK GDP in Q2 would be a dramatic development.

"There would be immediate monetary policy implications which would challenge expectations ofradical 'monetary activism' by a Carney-led BoE.

"Even if the data only show a near-term improvement, it is hard to see how a Carney-led BoE would implement more radical monetary policy loosening against the backdrop of an acceleration in GDP to trend-like growth rates."

If markets expect Carney to hold steady on his ascension to power at the BoE then expect further GBP gains.

9:30: UK services does it again! Sterling rises

The British pound sterling has headed higher in morning trade following news that UK services PMI hits highest level since Jan 2012.

UK May PMI services came in at 54.9 v 53.1.

A massive beat. GBP already now 0.3 pct up on the US dollar and 0.4 pct higher against the euro

8:45: GBP-AUD surges to 1.600

The Australian dollar is feeling the heat again today.

 Jeremy Cook at WorldFirst says:
"Overnight the AUD has taken another broadside from traders after GDP numbers for Q1 disappointed. Output increased by 0.6% between January and March which was the slowest since 2011 and almost guarantees that a rate cut is pencilled in for the RBA’s next meeting in early July."

 GBP-AUD is at 1.6003. Relief for those looking to buy Australian dollars. (READ OUR UPDATE ON GBP-AUD's 1 YEAR HIGH HERE)

8:00: As things stand at market open

The British pound sterling (Currency:GBP) is largely flat save for a hefty gain against the Australian dollar. Come back for an update on the afflictions to AUD, we will have an article or two up within the hour.

A look at the spots:

The pound to euro exchange rate is 0.1 pct higher on Tuesday night's close at 1.1721.
The pound to US dollar exchange rate is 0.05 pct higher at 1.5320.
The pound to Australian dollar rate is 0.8 pct higher at 1.5600.

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

8:55: Ahead UK Service PMI - disappointment in the offing?

Sterling is likely to remain in tight ranges across the forex boards until 9:30 when the UK services PMI is released. Last night we highlighted the strong probability of a disappointment.

WorldFirst agree saying:

"UK services PMI expected to be the highest since August last year (Olympic time). Looking for a disappointment."

8:50: Commerzbank say GBP is merely in corrective mode

So are we witnessing a renewed dynamism in the British pound?

Not really says Karen Jones, senior analysts at Commerzbank:

"GBP-USD has continued to drift higher in its corrective mode. Analysts at Commerzbank suspect that the corrective rebound will extend further to the 78.6% retracement resistance at 1.5470.

"However, we continue to view the current strength as corrective only. We will maintain an overall negative bias while capped by the 1.5601 May high.”

According to Jones the outlook for the GBP-USD rate sees interim support at 1.5240/1.5190 ahead of key support, which remains the 1.5035/1.4997 target zone, made up of the April and the 20th of March lows as well as the 78.6% Fibonacci retracement of the March- to-May rise.

Support at 1.4997 is regarded as the last defence for 1.4832, the March low.

8:45: Overnight data raises eyebrows

The British Retail Consortium Shop Price Index released overnight was never meant to be a major event for sterling. Nevertheless, it has surprised!

The report shows that Month on Month price gains fell to -0.1 pct in May from 0.4 pct in the previous month.

The first time this has happened in three and a half years.

Deflation?!