Following the FOMC’s policy announcement, in which it pledged to adjust fiscal policy to meet the needs of the US economy, the Pound fell slightly against the ‘Greenback’. However, another piece of better-than-forecast UK data allowed Sterling to recoup losses.
The Pound Sterling Exchange Rate was in the region of 1.5569 against the US Dollar as of 10:10 am GMT
Although data compiled by Markit/CIPS showed that construction output in the UK contracted for a sixth consecutive month in April, the pace of contraction was less severe than expected.
The index rose from the 47.2 recorded in March to 49.4 in April, significantly better than the 0.8 increase economists forecast.
The sector is now within reaching distance of the 50 mark which separates growth from contraction.
In a statement issued with the data Tim Moore, a Senior Economist with Markit, asserted: ‘UK construction sector output was closer to stabilisation than at any time since October 2012, according to the latest survey data. A slower decrease in output reflected an element of catch-up after some severe weather delays earlier in the year.’
Moore continued: ‘Total construction output was mainly supported by higher levels of residential building activity in April. Some firms cited a boost to output volumes from contract wins on new house building schemes. Civil engineering remained the weakest construction sub-category, with public sector order inflows scarce outside of big-ticket infrastructure projects.’
Although the construction sector still has a way to go, Moore’s comments were moderately positive: ‘The overall survey findings are an early indication that construction will act as less of a drag on UK GDP over the second quarter of 2013. April’s data also highlights a cautious degree of positive sentiment about the year-ahead outlook.’
Construction weakness was the biggest dent in UK growth in the first quarter of 2013.
But there was a cautious close to his statement: ‘However, total new work dropped for the eleventh month running during April, which further reduces the likelihood of improving in employment patterns across the sector.’
Before the data release the Pound was trading in the region of 1.5546 against the US Dollar, following the publication of the news Sterling strengthened to 1.5561.
The Pound/Euro exchange rate is likely to experience significant movement following the ECB rate announcement. The Euro slid against the Pound this morning as investors speculate on the likelihood of the central bank issuing a rate cut.
Current Pound Sterling (GBP) Exchange Rates
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5569 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1828 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.5223 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.8386 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6427 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8455 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6573 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5447 <
(As of 10:10 am GMT)
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