Sterling fell versus the euro and the dollar this morning after UK construction PMI data came in softer than market forecasts, with sovereign selling putting additional pressure on the pound.
Activity growth in Britain’s construction sector slowed more than expected in October to its weakest in eight months, a survey of purchasing managers showed on Tuesday.
The ISM construction figure lies in stark contrast to the manufacturing figure yesterday which showed an increase in positive sentiment. The GDP figure was also positive but most of the gains have been given back to the market as traders consider the reasons to sell the pound more convincing than reasons to buy.
Thursday’s bank of England announcement could scupper further foreign exchange rate rises in the near term and any clients with a large foreign exchange transaction should consider having a stop order in place to protect themselves from adverse event risk.