Pound Falls As U.K. Construction Activity Shrinks To 11-month Low
March 04 2019 - 2:09AM
RTTF2
The pound dropped against its major counterparts in the European
session on Monday, erasing its early gains, after a data showed
that U.K. construction sector activity contracted in February for
the first time since March 2018.
Survey data from IHS Markit showed that the seasonally adjusted
construction Purchasing Managers' Index, or PMI, fell to 49.5 from
50.6 in January. Economists had forecast a score of 50.5.
The reading was the lowest since March 2018, when snow
disruption hurt the sector.
Any reading below 50 suggests a contraction in the sector.
Meanwhile, European stocks rose as investors remained focused on
U.S.-China trade developments and looked ahead to the ECB meeting
later this week for directional cues.
On the trade front, the U.S. and China appear more likely to
reach some sort of trade agreement when U.S. President Donald Trump
and Chinese leader Xi Jinping meet later this month.
The currency traded mixed against its major counterparts in the
Asian session. While it held steady against the euro and the
greenback, it rose against the yen and the franc.
The pound slipped to 1.3199 against the greenback, from a high
of 1.3254 hit at 4:30 am ET. On the downside, 1.30 is possibly seen
as the next support level for the pound.
The pound retreated to 147.62 against the yen and 1.3208 against
the franc, from its early high of 148.31 and a 4-day high of
1.3271, respectively. The next possible support for the pound is
seen around 146.00 against the yen and 1.30 against the franc.
After rising to a 4-day high of 0.8558 against the euro at 4:00
am ET, the pound reversed direction and pulled back to 0.8590. The
next likely support for the pound is seen around the 0.87 area.
Survey data from Sentix showed that Eurozone investor confidence
improved in March, remaining negative for the fourth consecutive
month.
The investor confidence index for the euro area rose to -2.2 in
March from -3.7 in February. Economists had forecast -3.1.
Looking ahead, U.S. construction spending for December is
scheduled for release in the New York session.
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