Pound pushed higher by construction data

Sterling is near a seven-month high following some solid UK construction output figures this morning.

The pound is trading at $1.5856, up 0.3% on the day after UK construction output grew by 2.2% in July, with analysts expecting an increase of 2.1%. This is the latest in a string of positive economic data from the UK.

Yesterday, Bank of England governor Mark Carney said that the £375 billion per month buying scheme is paying off and that this is visible in the form of improving retail, manufacturing and construction data. Mr Carney also confirmed the Bank is on track to achieve its inflation target of 2%.

Traders have been buying sterling as they feel that the Bank will begin to trim its monthly stimulus package as the economy improves. Mr Carney has already stated that the bond-buying operation will be reduced when the jobless rates falls.

At 3pm (London time), US business inventories are released, with economists predicting an increase of 0.4% on the month. If inventories decline it could indicate that consumer demand is high, which may lead traders to sell the pound and buy the dollar.

Spot FX GBP/USD (DFB) chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.