The results of Europe's PMI Index, released today are expected to show that growth in European services industries was the strongest in more than five years, adding further weight to the argument that the European Central Bank (ECB) will raise rates on Thursday.

The euro is expected to rise against the dollar on the news and this morning the European currency stood at 0.7735 to the dollar and at 1.4510 to the pound.

Yesterday the euro hit a 13 month high against the dollar rising to a peak of $1.2979, its highest since May 2005, and was trading around $1.2960.

It is widely expected that the ECB's governing council led by Jean-Claude Trichet will lift its interest rate to 2.75 per cent on June 8th.

The Royal Bank of Scotland's PMI index is a survey of 2,000 purchasing managers throughout the 18 member states of the eurozone area.

In other news the Turkish lira continued its fall against the euro and the dollar prompting speculation that the country's central bank will reverse a five-year trend of rate cuts when it meets at an emergency meeting tomorrow.

A report for May showed that inflation was running at almost twice the target five per cent.

"Market sentiment is getting weaker day by day," Sevin Ekinci, an economist at WestLB in Istanbul told the Financial Times.

"The inflation situation is really a shock."