British pound rose sharply against the US dollar on Friday, after a report showed that construction activity in the United Kingdom increased at the fastest rate in three years in July, while focus was set on the US unemployment rate and non-farm payrolls reports.
GBP/USD reached a session high at 1.5175 at 8:33 GMT, after which consolidation followed at 1.5152, gaining 0.20% for the day. Support was expected at July 16th low, 1.5046, while resistance was likely to be met at July 31st high, 1.5254.
Today the Chartered Institute of Purchasing and Supply reported that UK construction PMI increased more than projected during July, reaching a reading of 57.0 from 51.0 in June. Experts had projected a much lesser increase to 51.5. Julys result was the highest since July 2010.
Another report said that house prices in the United Kingdom rose at the fastest pace in three years in July. According to data by Nationwide Building Society its house price index rose by 3.9% in July annually, considerably outperforming the result in June, when prices increased by 1.9%. This increase was the largest since August 2010, exceeding preliminary estimates. The average price of a casual UK house reached 170 825 GBP in July from 168 941 GBP in June. The monthly performance of the indicator stated a 0.8% rise in July from a 0.3% increase a month ago.
Meanwhile, market participants awaited the US non-farm payrolls report for indications on the development of US labor market, after yesterday it became clear that initial jobless claims fell by 19 000 to 326 000 during last week, which was the lowest number of claims since the beginning of 2008, considerably outstripping initial estimates that claims will reach 345 000. On Wednesday another report said that the private sector in the United States added 200 000 new job positions in the month of July, surpassing preliminary estimates of 180 000 jobs, as this indicator usually provides certain clues on the development of non-farm payrolls in the country.
Elsewhere, the pound advanced against the euro, as EUR/GBP erased 0.22% to trade at 0.8718 at 11:40 GMT. Additionally, the sterling was higher against the Japanese currency as well, with GBP/JPY rising by 0.49% to trade at 151.28 at 11:41 GMT.
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