Pound Drops Before PMI Services Release

The pound dropped against its major rivals during the early morning session ahead of the PMI services report that may show the service-industry growth continued with consolidation. The June services PMI is released today at 9:30, with the expectations for the headline figure to have declined to 53.5 from 53.8 in May. A recent batch of economic data indicates that Britain is struggling to recover from recession, while investors focus their attention to Thursday’s central bank meetings in the UK and the Eurozone. Market participants speculate that the European Central Bank will further tighten its monetary policy while UK interest are expected to remain at record lows for prolonged period of time. Some analyst believe that any further evidence of deteriorating economic outlook in UK could add pressure on BoE policymakers to go for more monetary stimulus. Expect for the pound to remain under pressure against its major rivals should we see the PMI services release surprising on the downside.