British pound erased losses against the US dollar

On Tuesday British pound was off lows versus the US dollar, as it was reported that UK Construction CIPS indicator rose in May to highest value since October 2012.

After dipping to 1.5283, lowest level for current trade, pound climbed to 1.5320 during European trade. Support was expected at Monday low, 1.5190, while resistance was to be met at Monday high, 1.5204.

Earlier today official report said that Construction CIPS (The Chartered Institute of Purchasing and Supply) indicator registered higher value in May to 50.8, while the preceding period reading was 49.4. Projections showed a value of 49.6.

The report implied that rising construction output could be supportive to British economic growth in the second quarter of the year, but also added that the sector was not likely to contribute to overall employment level. Major reason for the increased value was the higher residential construction activity, which rose at a fastest rate for the last two years. New orders rose in number for the first time this year. Another index, that gauges output, also recorded a higher value, as this was for the first time since October 2012. On the other hand, employment rate in construction remained almost unchanged, while raw materials expenditures took a rise for 40th consecutive month, reflecting rising energy costs.

Yesterday another report stated that British Manufacturing CIPS indicator also rose in May to 51.3, above expectations for a reading of 50.1, while during the previous month it showed a revised reading of 50.2.

Meanwhile, US dollar gained ground on a wide scale against its major peers, after yesterday losses on weak manufacturing data from the United States, as manufacturing sector shrank for the first time in six months during May.

Investors remained wary ahead of monthly meetings of the Bank of England and the European Central Bank on Thursday, while later today a report, regarding US Trade Balance is expected.