Investing.com - The pound performed well against most major currencies on Wednesday despite disappointing data from the construction industry.
Against the weakened US dollar, sterling remained stable above the 1.32 mark. At 09:04 GMT, GBP/USD was 1.3243, up 0.27% on the previous session close.
Financial data company IHS Markit reported its UK construction purchasing managers’ index (PMI) dropped to 51.9 in July, down from 54.8 in June, showing the slowest pace of growth for the construction industry for 11 months. The forecast from economists had been 54.5.
Heightened political uncertainty surrounding Brexit and the recent shock election result hampered new orders. While construction growth slowed in July, the UK manufacturing PMI on Tuesday was better than expected at 55.1.
The dollar lurked around a 15-year low against other major currencies on Wednesday. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 92.74, down 0.19% from the previous close.
The Trump Administration is coming under increasing pressure, and this in turn is affecting the dollar strength. The White House stated on Tuesday that President Donald Trump had in fact participated in drafting his son’s statement regarding a meeting with a Russian lawyer during the 2016 election campaign.
On the back of hawkish interpretations of the European Central Bank’s intention to taper its stimulus programme, and positive data from the eurozone such as 0.6% gross domestic product growth for the second quarter - double the UK’s own growth figures - the euro has been buoyant for several weeks. The euro was at its highest against the dollar for two and a half years on Wednesday.
EUR/GBP was up 0.16% at 0.8951.
The pound rallied against safe haven currencies, GBP/JPY was 146.62, a jump of 0.60%, while GBP/CHF was up 0.45% at 1.2809.
The pound fared equally well against commodity currencies. The pound rose 0.28% on the Australian dollar, GBP/AUD was 1.6618. The Reserve Bank of Australia voted to keep interest rates unchanged on Tuesday morning.
Following disappointing employment figures from New Zealand in the early hours of Wednesday morning, GBP/NZD was up 0.78% at 1.7822
Sterling was up 0.42% against the Canadian dollar, GBP/CAD was 1.6629.
Investors will be watching the release of the UK services PMI on Thursday morning. The growth of the services sector is more indicative of economic performance in the UK than the manufacturing and construction PMI readings. The services data release comes shortly before the Bank of England announces its interest rate decision.
The Monetary Policy Committee will vote on whether to hike rates, or keep them unchanged at the historically low 0.25%. With two confirmed hawks in the MPC, and hawkish comments from Andy Haldane last month, the jury is out on whether the MPC will vote to hike or not. PMI figures should act as a guide to the undecided amongst the MPC.