Sterling near four-week highs, awaits construction data
LONDON, Sept 2 Sterling was pinned near one-month highs on Friday awaiting a construction sector survey that could feed into expectations that the economy is holding up well after the Brexit vote.
It rose above $ 1.33 for the first time in four weeks on Thursday, after data showed the British manufacturing sector staged one of its sharpest rebounds on record in August. The Markit/CIPS Purchasing Managers’ Index (PMI), jumped to a 10-month high of 53.3 in August, recovering from the three-year low it hit in July after Britain’s June 23 vote to leave the EU.
Construction sector PMI is due at 0830 GMT and is likely to show a small rebound, although it is still expected to be in contractionary territory.
“Having seen the stunning manufacturing PMI yesterday, the market may have adjusted up its forecast for the construction PMI somewhat. Thus the index may have to exceed expectations by more than usual to push sterling higher,” said Marshall Gittler, head of research at FXPrimus.
Sterling was a tad firmer at $ 1.3274, not far from its four-week high of $ 1.3318 struck on Thursday. It jumped more than 1 percent on Thursday and is on track for its third straight week of gains, it best run since April.
A lot on how sterling holds up against the dollar will also depend on U.S. non-farm payrolls data, due at 1230 GMT. Employers are expected to have added 180,000 jobs in August, according to the median estimate.
The euro was down slightly at 84.345 pence, having struck a four-week low of 83.885 pence on Thursday.
Sterling has performed reasonably well in the past few weeks, holding above a 30-year low of $ 1.2798 struck on July 8, helped by better-than-expected data that has taken the edge off concerns about a sharp decline in economic activity following the shock Brexit vote.
Surveys earlier this week showing improved consumer confidence and a rise in British house prices in August have added to signs the economy is hold up well so far. (Reporting by Anirban Nag; Editing by Jeremy Gaunt)
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