Strong UK construction PMI sent GBP/USD on one-week highs

The sterling climbed to its highest point in a week against the US dollar on Tuesday, after a report showed that activity in UK construction sector rose to a six-year high in August.

GBP/USD soared to a session high at 1.5601 at 8:30 GMT, also the pairs highest point since August 26th, after which consolidation followed at 1.5574, gaining 0.19% for the day. Support was expected to be received at September 2nd low, 1.5504, while resistance was to be met at August 26th high, 1.5635.

Minutes ago the Chartered Institute of Purchasing & Supply (CIPS) in cooperation with Markit research group reported that activity in the sector of construction in the United Kingdom rose at the fastest pace since September 2007 in August. The construction PMI came in at 59.1 in August up from a reading of 57.0 in July, while preliminary estimates pointed that the index will decrease to 56.9. This data spoke of a sharp increase in overall business activity in the sector and the strongest rate of output expansion since September 2007. “With overall output levels now rising at the fastest pace for around six years, it seems highly likely that the construction sector will provide another positive contribution to U.K. GDP in the third quarter of 2013,” senior Markit economist Tim Moore said, cited by Investing.com.

The above mentioned indicator came out one day after another report said that manufacturing PMI in the United Kingdom rose to a 30-month high in August, reaching 57.2 from a reading of 54.8 in July, which was a revision up from 54.6 previously, as this boosted outlook over a good performance of manufacturing sector in Q3. Such string of positive data could also urge Bank of England to raise its benchmark interest rate sooner than anticipated.

Elsewhere, the pound was higher against the euro as well, with EUR/GBP cross down by 0.38% for the day to trade at 0.8457 at 9:24 GMT. GBP/JPY pair was gaining 0.41% to trade at 155.09 at 9:26 GMT.