The just out survey report revealed that growth in Britain’s services sector which accounts for the largest proportion of the nation’s GDP moderated for the second straight month in August, primarily as a result of the slowest increase in new businesses since April 2013.

In Europe, the final services PMI numbers from the Euro zone and most of its economies came above expectations for August. Later in the day, the ECB will meet to discuss its interest rate policy amid recent speculation that the bank is looking to expand its current QE programme. Across the Atlantic, jobless claims, trade data and reports on the nation’s service industry will be released today.

Pound Sterling – UK Markets

Sterling traded broadly higher against its major currency counterparts in yesterday’s trading session. Gains were kept in check as data indicated that activity in the UK construction sector expanded at a slower than expected rate for August. However, the sector remained well paced in expansionary territory helped by a sustained recovery in both residential and commercial building activity. The upbeat data failed to lift expectations surrounding UK’s economic growth for the third quarter as a Markit PMI report earlier this week had indicated a slowdown in the manufacturing sector for August.

The Pound has extended its losses against its major peers after the just out survey report revealed that UK’s dominant services sector experienced its weakest activity in more than two years for August, fuelling concerns about slower economic growth in the third quarter of this year and dimming prospects for higher interest rates. Furthermore, the Markit’s data compiling all the PMI figures indicated that the UK economy is set to grow by 0.5% in the current quarter, down from 0.7% in the three months to June.

US Dollar – US Markets

The US Dollar is trading on a stronger footing against the Pound this morning, with investors waiting on the sidelines ahead of tomorrow’s crucial US nonfarm payrolls report for August. Yesterday’s ADP estimate on private payrolls indicated that employers recorded a slower than anticipated pace of hiring for August. Though below market expectations, the somewhat upbeat ADP data bolstered the view that the US labour market was strong enough for the Fed to consider raising interest rates this year. Later today, investors will keep a tab on new filings for unemployment benefits for more cues to further gauge the health of the US jobs market. In addition, traders will eye two US economic releases, the Markit’s final estimate of its services PMI and a report on the ISM non-manufacturing index, both of which are expected to indicate that a strong expansion is still underway in the services sector.

Fed’s latest Beige book out yesterday suggested that the US economy continued to expand steadily. The report comes two weeks before the Fed’s pivotal September policy meeting.

Euro – European Markets

The ECB will hold its September monetary policy meeting later today and with the central bank expected to keep its benchmark interest rate unchanged, focus will be on the commentary from the central bank President, Mario Draghi, at the press conference where he is likely to downgrade the institution’s quarterly forecast and provide clarity on the future course of policy action. Since the ECB’s last policy meeting, European equities have been in the midst of a global market rout, while some macroeconomic indicators have hinted to weakness in the region’s economy. This along with a weak inflation outlook has led to expectations that the ECB might extend its easing programme. Traders will tune in for any language change in the ECB’s policy statement today for further direction.

The shared currency is trading higher against the Pound this morning after final data from Euro zone’s services sector indicated that activity in the region’s non-manufacturing sector for August expanded at a faster pace than previously estimated. Moving ahead, investors will eye data on Euro zone’s retail spending for July, scheduled for release today.

Other Currencies – Highlights

The Australian Dollar – US Dollar currency pair dropped close to multi year lows earlier today after data showed that Australia’s retail sales fell for the first time in over a year last month. The unexpected decline in July retail sales data is likely to have fuelled worries about the nation’s growth outlook, particularly as GDP data released yesterday showed that growth in the Australian economy cooled to its slowest in nearly two years for the April – June quarter. Sentiment among Australian currency traders after yesterday’s GDP print is anticipated to have further weakened, as record low interest rates and a booming housing market failed to lift household spending. In some positive news, separate data revealed that Australia’s trade deficit narrowed sharply in July as exports rose, while imports stayed relatively flat.

Moving ahead, investors will keep a tab on a set of US economic releases due later in the day for direction, as well as eye Friday’s crucial US nonfarm payrolls report for further indications on the strength of the US economy.