Sterling hits one-month high versus dollar, construction data in view

Tue Dec 4, 2012 2:51pm IST

Border Security Force (BSF) soldiers ride their camels as they rehearse for the "Beating the Retreat" ceremony in New Delhi January 27, 2015. REUTERS/Ahmad Masood

"Beating The Retreat" Rehearsals

Rehearsals are on for "Beating the Retreat" ceremony which symbolises retreat after a day on the battlefield, and marks the official end of the Republic Day celebrations.  Slideshow 

* Sterling rises past stops to hit one-month high vs dollar

* Long positions could be threatened by soft UK data

* Real money investors cited as buyers of sterling

By Philip Baillie

LONDON, Dec 4 (Reuters) - Sterling struck a one-month high against a broadly weak dollar on Tuesday on buying by long-term investors, but risked giving up some of those gains if UK construction data disappointed.

A Reuters forecast pointed to a drop in the construction purchasing managers' index (PMI) to 50.5 for November, from 50.9 the previous month. The data was due at 0930 GMT.

A figure above 50 indicates expansion and traders said some long sterling positions could be unwound if data showed that the sector contracted last month.

Sterling hit a one-month high of $1.6124, triggering stop-loss buy orders just above $1.6120 with reported option barriers at $1.6150 likely to check near-term gains.

The pound was flat against the euro, with the single currency at 81.10 pence, just off the five-week high of 81.325 it posted against the pound last week.

"We are not expecting any major moves unless the construction PMI is wide of expectations," said Richard Driver, analyst at Canton FX. "But broadly speaking we see technical resistance above $1.62."

Attention will stay on UK Finance Minister George Osborne's "autumn statement", which he is due to present to parliament on Wednesday. There is speculation that he is likely to miss his debt and growth targets, raising the risk that Britain could lose its prized triple-A credit rating.

"We tend to be seeing more of the same from Osborne, it is probably going to increase speculation around the AAA credit rating. Growth is going to be poor in Q4 which is bringing the rating agencies into play," Driver said.

"More of the same is not necessarily good for sterling."

Earlier, data showed British retail sales edged up in November, though by less than analysts were expecting. The improvement followed a solid reading from November's retail sales index from the Confederation of British Industry.

Still, overall activity in the economy remained sluggish as a UK manufacturing PMI survey on Monday showed the sector contracted in November.

Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Reuters Showcase

Vodafone Ruling

Vodafone Ruling

Government will not appeal Vodafone tax ruling   Full Article 

Indian Railways

Indian Railways

Private refiners compete with state firm to sell diesel to railways   Full Article 

Ranbaxy Results

Ranbaxy Results

Dec-quarter net loss widens on forex loss  Full Article 

Market Eye

Market Eye

Sensex, Nifty retreat from record highs on profit-taking.  Full Article 

Tech Talk

Tech Talk

Apple takes high road in China smartphone standoff with Xiaomi.  Full Article 

Business Strategy

Business Strategy

Uber scraps commissions for its New Delhi taxis.  Full Article 

Job Cuts

Job Cuts

Sony to cut 1,000 jobs in smartphone business - sources.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage