British Pound Slips to New Lows on Weak UK Construction Data

The British pound today declined against the US dollar staring in the early European session after the release of disappointing UK construction data. The pound’s decline gained traction during the early North American session after the release of the US non-farm payrolls report.

The GBP/USD currency pair lost over 140 points to decline from a daily high of 1.4278 to hit a low of 1.4135 in the American session.

The currency pair was trading relatively flat during the Asian session, but declined slightly towards the early European session. The pair’s initial decline was triggered by the modest recovery in the US dollar and the prevailing Brexit woes facing the UK. The release of the weak Markit/CIPS UK Construction PMI in the early European session accelerated the pair’s decline. The PMI came in at 50.2 in January, which was its lowest level in 4 months, versus the expected 52. The construction PMI was slightly above the 50 threshold, which marks the boundary between a contracting industry and a growing industry.

The release of the positive US non-farm payrolls report by the Bureau of Labor Statistics triggered the currency pair’s decline in the early American session. The NFP was better than expected, while the unemployment rate was in line with expectations among other positive US macro indicators.

The currency pair’s short-term performance is likely to be affected by the release of the University of Michigan consumer survey and the US factory orders for December scheduled for 15:00 GMT.

The GBP/USD currency pair was trading at 1.4166 as at 14:42 GMT having dropped from a high of 1.4278. The GBP/JPY currency pair was trading at 156.21 having declined from a high of 156.61.

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