Pound Falls As U.K. Construction PMI Drops To Near 3-year Low
May 04 2016 - 1:25AM
RTTF2
The pound weakened against its key counterparts in European
trading on Wednesday, as the U.K. construction sector activity in
April expanded at weakest pace since June 2013.
Data from Markit and Chartered Institute of Procurement &
Supply showed that the seasonally adjusted Construction Purchasing
Managers' Index expanded to 52.0 in April.
However, the latest reading was down from 54.2 in March and
pointed to the slowest expansion of business activity since
mid-2013.
Economists were looking for a reading of 54 points.
European stocks are weaker, on the back of mixed earnings
results and as worries about global growth remained.
The pound showed mixed trading against its major rivals in Asian
deals. While the currency rose against the franc and the yen, it
held steady against the euro. Against the dollar, it fell.
The pound pared gains against the yen with the pair trading at
155.00, off its previous session's high of 156.15. The pound is
likely to find support around the 152.00 zone.
Extending early slide, the pound hit a weekly low of 1.4485
against the dollar. If the pound-dollar pair extends slide, it may
locate support around the 1.43 mark. At Tuesday's close, the pair
was worth 1.4534.
Reversing from an early high of 1.3918 against the franc, the
pound slid to a 2-week low of 1.3849. On the downside, 1.35 is
possibly seen as the next support level for the pound-franc pair.
The pair was worth 1.3867 when it ended deals Tuesday.
Survey data from the UBS investment bank showed that
Switzerland's stagnating nominal house prices and a slowdown in
household debt growth dampened the housing bubble indicator in the
first quarter.
The UBS Swiss Real Estate Bubble Index fell marginally to 1.38
points in the first quarter from 1.41 in the prior quarter.
The pound, having advanced to 0.7893 against the euro at 3:00 am
ET, reversed direction and fell to more than a 2-week low of
0.7935. The pound is seen finding support around the 0.82 mark. The
pair finished yesterday's trading at 0.7909.
Survey data from Markit showed that the euro area private sector
expanded at a slower pace as estimated in April.
The composite output index dropped marginally to 53 in April, in
line with flash estimate, from 53.1 in March. The index signaled
expansion in each of the past 34 months.
Looking ahead, at 6:15 am ET, Germany's Bundesbank President
Jens Weidmann is expected to speak at annual meeting of the Asian
Development Bank in Frankfurt.
In the New York session, U.S. ADP private sector employment data
for April, ISM non-manufacturing PMI data for April, U.S and Canada
trade data for March, U.S. factory orders and durable goods orders
for March and U.S. crude oil inventories data are slated for
release.
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