REFILE-Stg at 1-mo high vs euro; UK data brightens outlook
* Sterling hits one-month high versus the euro
* U.S. employment data at 1230 GMT to dictate currency moves
* Better data lowers bets on more stimulus by the BoE
By Anooja Debnath
LONDON, Nov 2 (Reuters) - Sterling rose to a one-month high against the euro on Friday, helped by better-than-expected UK construction activity data that added to optimism about a sustained economic recovery.
The euro fell 0.3 percent against the pound to hit 79.965 pence, its weakest since Oct 3. Euro zone exporter bids are cited at 79.80/90 pence, traders said, with losses in the euro likely to gather pace if it closes below its 55-day moving average of 80.09 pence on Friday.
In contrast to the upbeat UK report, data showed euro zone manufacturing shrank for the 15th month running in October as output and new orders fell.
The Purchasing Managers' Index (PMI) for construction activity in the UK rose above expectations to 50.9, which indicated expansion in the sector, but firms remained cautious about future growth, according to the survey.
"Today's data has restored and refreshed sterling's post third quarter GDP rally," said Nawaz Ali, UK market analyst with Western Union Business Solutions.
"Weak manufacturing PMI data yesterday had led traders to question the sustainability of any recovery going into the fourth quarter but today's data is certainly a positive surprise."
Data last week showed the UK economy had climbed out of recession although there are doubts about the underlying strength of the economy.
Ali said the market focus would turn to the U.S. employment figures due at 1230 GMT on Friday and going forward to the presidential elections.
A better-than-expected jobs report could boost risk appetite and sterling while a disappointing number could hurt the pound and the euro.
"The dollar tends to weaken if we see better data and there is a chance we could see some euro weakness after the data," said Peter Kinsella, currency strategist at Commerzbank.
The euro has been under pressure as the crisis in the currency bloc rages on and a Greek court ruled the country's austerity measures may be unconstitutional, raising concerns about Athens' ability to implement austerity measures needed to secure bailout money.
Sterling slipped against a broadly stronger dollar before the U.S. jobs data. The pound was down 0.2 percent against the dollar to $1.6094. Near-term support is seen at its 55-day moving average of $1.6035 while offers are layered above $1.6130.
The pound has been in demand from Asian central banks and other long term investors in recent days following hopes the UK recovery will gather pace and douse expectations of more easing.
Friday's UK construction figures followed a recent slew of better-than-expected consumer credit, mortgage, CBI retail sales apart from the forecast-busting growth data.
Comments from BoE deputy governor Charlie Bean on Wednesday chimed with a recent lowering of expectations that the central bank will opt for more quantitative easing (QE) next week, providing support for the pound.
- Tweet this
- Share this
- Digg this
Up to 150 people were feared trapped by a landslide triggered by heavy rains in Maharashtra on Wednesday, the inspector general of the national disaster force told Reuters, saying that the first batch of emergency workers had arrived at the scene. Full Article