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Forex - GBP/USD holds steady near 6-year highs

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Investing.com -

Investing.com - The pound held steady against the U.S. dollar on Wednesday, hovering close to six-year highs as demand for sterling remained supported after U.K. construction data added to optimism over the economic recovery.

GBP/USD hit 1.7176 during U.S. morning trade, the pair's highest since October 2008; the pair subsequently consolidated at 1.7157, inching up 0.04%.

Cable was likely to find support at 1.7150 and resistance at 1.7250.

The pound remained supported after the Markit U.K. construction purchasing managers' index rose to 62.6 in June from 60.0 in May, the highest reading since February. The consensus forecast had been for a decline to 59.5.

Construction firms reported that they are hiring staff at the fastest rate since the survey began in 1997.

Growth was fastest in the home building sector the report said, while commercial building construction also picked up and civil engineering growth slowed.

The report came one day after data showed that the U.K. manufacturing sectors expanded more rapidly than forecast in June.

The upbeat reports indicated that the U.K. economy continued to grow at a strong pace in the second quarter, fuelling expectations that the deepening recovery will prompt the Bank of England to raise interest rates before then end of this year.

In the U.S., the latest ADP nonfarm payrolls report showed that the U.S private sector added 281,000 jobs last month, outstripping expectations for an increase of 200,000 and the highest since November 2012.

The upbeat data eased concerns over the outlook for the U.S. recovery after data last week showing a sharp economic contraction in the first quarter underlined the view that the Federal Reserve would keep rates on hold for longer.

A separate report showed that U.S. factory orders fell 0.5% in May, compared to expectations for a 0.3% decline, after an upwardly revised 0.8% increase the previous month.

Sterling was higher against the euro, with EUR/GBP shedding 0.23% to 0.7958.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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