Forex – Sterling touches fresh six-week lows after PMI data

© Reuters. Sterling touches fresh six-week lows after PMI data

Investing.com – The pound touched fresh six-week lows against the dollar on Thursday after data showing a modest increase in UK construction output in February, as a slowdown in new orders added to concerns over the economic outlook.

touched lows of 1.2262, the weakest level since January 20 and was last at 1.2269, off 0.22% for the day.

The Markit UK construction purchasing managers’ index ticked up to in February from January’s 52.2, compared to economists’ forecasts for an unchanged reading.

Civil engineering replaced house building as the main growth driver. Growth in house building increased at the slowest pace for six months, while commercial building declined for the first time since October 2016.

New orders increased at the slowest pace since October and intense cost inflation persisted, as raw material prices increased at a rate close to January’s eight-and-a-half year record.

The report came a day after a similar survey showed that UK manufacturing activity grew more slowly than expected last month.

Markit is to publish its PMI survey of Britain’s dominant service sector on Friday.

Demand for the dollar continued to be underpinned after the latest hawkish comments from a Federal Reserve policymaker underlined expectations for a rate hike later this month.

An improving global economy and a solid U.S. recovery mean it will be for the Fed to hike rates Fed Governor Lael Brainard said on Wednesday.

Coupled with the comments of , and looking ahead to a speech by Fed chair Janet Yellen on Friday, Brainard’s remarks reinforced expectations that the next U.S. rate hike will come at the Fed’s March policy meeting.

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