The Pound Sterling edged higher against the Euro following the latest data release on UK construction which beat expectations and reinforced an improved start to this year despite uncertainty in UK politics. According to the February PMI construction report, the sector’s growth improved to a reading of 60.1 in February, a 4-month high and up from January’s 59.1 reading which was better than the fall that analysts’ consensus had been calling for. Analysts report that the political headwinds may put some pressure on the Pound Sterling as the General Election looms and new political wrangling could mean more taxes and regulation, especially of the UK’s financial sector.
As reported at 10:36 am (GMT) in London, the EUR/GBP was trading at 72.70 pence, a gain of .1% however not far off Monday’s 7-year trough at 72.35 pence; the pair was more recently trading at 72.64 pence, only a few pips from the session low. The GBP/USD was inching higher at $1.15373.
Pound Sterling’s Performance in Focus
Of the G10 currencies, the Pound Sterling has provided the strongest performance on investors’ expectations that the Bank of England would be raising interest rates in 2015. Currency strategists say that the BoE, however, must carefully balance Sterling’s strength against its neighbor and greatest trading partner, the Eurozone, so as not to further disrupt trade.