Before the release of UK construction data the Pound was trading close to an eight-month high against both the Euro and US Dollar.
Although the ‘Greenback’ recovered some losses ahead of the release of Friday’s US non-farm payrolls data, its relationship with Sterling remained bearish, while the Euro was feeling the pressure ahead of the European Central Bank rate decision and Italian confidence vote.
The Pound Sterling to Euro Exchange Rate was in the region of 1.1986 as of 10:50 GMT.
Although the construction report failed to meet estimates, slipping from 59.1 in August to 58.9 in September rather than rising to 59.5 as expected, the Pound was little affected.
The sector may have expanded at a slightly slower pace than in the previous month, but the report revealed that residential construction enjoyed its steepest climb in ten years while business outlook optimism hit a three-year high.
Construction PMI held above the 50 mark separating growth from contraction for a fifth month, with all three main areas of the sector recording increased levels of business activity.
1 Euro is currently worth 0.8343 pence
Markit economist Tim Moore issued the following statement with the data; ‘Construction is no longer the weakest link in the UK economy […] The reversal in fortunes has spanned commercial, residential and public sector construction projects […] September’s survey suggested that constructors are beginning to react with confidence to the more positive landscape for the sector, as job creation and input buying both rose at robust rates over the month’.
This data, coupled with yesterday’s report detailing an increase in manufacturing sector employment, adds to signs that the UK economic recovery is well rooted and broad-based.
While today’s Eurozone and US news may have an impact on the Pound, investors will also be looking ahead to tomorrow’s UK services PMI.
The services sector contributes the most to overall UK growth, so if the gauge holds at 60.5 as economists expect Sterling’s bullish relationship with rivals like the Euro and US Dollar could continue for the rest of the week.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6219 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1986 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7355 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9710 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6168 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8343 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5767 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5068 <
(As of 10:50 GMT)
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