On Tuesday the British currency dipped to session lows after data signaled that
growth in the U.K. construction sector lost momentum in April; the upcoming general elections on tap.
GBP/USD touched session lows of 1.5088 immediately following the release of the data, before pulling back to 1.5118.
Sterling was higher against the euro, with EUR/GBP down 0.42% to 0.7338.
The construction purchasing managers’ index fell to 54.2 from 57.8 in March, research group Markit said, while analysts expected a more modest slowdown to 57.5 - the poorest rate of expansion in 22 months.
A reading below 50.0 indicates activity is declining, while a reading above that level is a signal it is increasing.
According to the report, construction firms delayed spending decisions ahead of the May 7 election, but job creation in the sector remained solid.
Business confidence regarding the 12-month outlook pulled back from the nine-year high seen in March, but remained strong.
The report came after data last week showing similar weakness in the U.K. manufacturing sector last month and another report showing that economic growth in the U.K. slowed sharply in the first quarter of the year.
Market players anticipated the survey data on Britain’s dominant service sector due on Wednesday for an clue on the economic outlook at the start of the second quarter.
Investors were also closely watching the outcome of Thursday’s parliamentary elections, which were widely expected to result in a hung parliament and an unstable coalition government.
