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Forex - GBP/USD nears 13-month high, boosted by construction PMI

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Forex Pros - The pound rose against the U.S. dollar on Wednesday, trading close to a 13-month high after a better-than-expected construction PMI added to the view that the U.K. economy is rebounding.

GBP/USD hit 1.6318 during European late morning trade; the daily high; the pair subsequently consolidated at 1.6311, gaining 0.27%.

Cable was likely to find support at 1.6070, Monday's low and resistance at 1.6329, Tuesday's high and a 13-month high.

The Markit/CIPS Purchasing Managers' Index for the construction sector jumped to 56.5 in February from 53.7 in January, confounding analysts' forecasts for a fall to 53.1. A reading above 50 indicates a rise in activity.

Bank of England policymakers have said there is a growing case to raise interest rates, especially if the economy performs well in the first quarter after a decline at the end of 2010.

January's reading was particularly strong because of a rebound after heavy snow in December. But Markit said a significant rise in new business and a reduced number of job losses kept the index elevated.

Meanwhile, the pound was down against the euro, with EUR/GBP gaining 0.14% to hit 0.8482.

Later Wednesday, Federal Reserve Chairman Ben Bernanke was to testify for a second day before the Senate Banking Committee in Washington, while the Fed was to publish its Beige Book. The U.S. was also to publish data on private sector payrolls compiled by payroll processing firm ADP.

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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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