Pound Rallies on Construction Data, Loses Gains Later

The Great Britain pound started the week strong, rallying on the back of favorable construction data. Yet by now, the currency has lost gains versus most of its major peers.

The IHS Markit/CIPS UK Construction Purchasing Managers’ Index was unchanged at 52.5 in May, while forecasters had predicted a decline to 52.0. The report said:

The figure was indicative of a moderate increase in total activity, albeit one that was subdued in the context of historical data.

Now, traders wait for the services PMI due for release tomorrow. Analysts expect the indicator to stay little changed as well.

Meanwhile, Brexit worries continued to weigh on the sterling. The June European Union summit draws closer, and optimists hope that the British officials will have some proposals for their EU colleagues to break the deadlock in the talks. But there are plenty of skeptics, who do not believe that the British government has enough will to find a compromise acceptable to all the parties involved in the discussion.

GBP/USD fell from 1.3336 to 1.3312 as of 20:10 GMT today after touching the daily high of 1.3398 earlier. EUR/GBP jumped from 0.8728 to 0.8786. GBP/CHF opened at 1.3174, rallied to the daily high of 1.3226, but fell to 1.3155 later.

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