Pound Falls As U.K Construction Sector Contracts

The British pound weakened against other major currencies in the European session on Tuesday, after data showed that the U.K. construction sector contracted in September on weak new work.

Data from IHS Markit showed that the U.K. IHS Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers' Index fell to 48.1 in September from 51.1 in August. The reading was expected to remain unchanged at 51.1.

The score was below the 50-change threshold for the first time in 13 months. The latest reading signaled the fastest decline in overall construction output since July 2016.

In the Asian trading today, the pound held steady against its major rivals.

In the European trading, the pound fell to 1.3245 against the U.S. dollar, from an early high of 1.3288. This may be compared to an early near 3-week low of 1.3229. The pound is likely to find support around the 1.31 region.

Against the euro and the yen, the pound dropped to 0.8865 and 149.76 from early highs of 0.8822 and 150.24, respectively. If the pound extends its downtrend, it is likely to find support around 0.90 against the euro and 146.00 against the yen.

The pound edged down to 1.2923 against the Swiss franc, from an early 4-day high of 1.2984. On the downside, 1.26 is seen as the next support level for the pound.

Looking ahead, at 8:30 am ET, Federal Reserve Governor Jerome Powell is expected to speak about regulatory reform at a financial regulation event jointly hosted by Reuters and George Washington University, in Washington DC.

At 12:30 pm ET, the Bank of Canada Deputy Governor Sylvain Leduc is scheduled to speak about Canadian business creation and productivity at the Sherbrooke Chamber of Commerce, in Quebec.

German banks will be closed in observance of German Unity Day holiday.

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