Investing.com - The pound fell to 31-year lows against the U.S. dollar on Tuesday, despite the release of upbeat U.K. construction activity data, as concerns over a potential hard Brexit dominated market sentiment.
GBP/USD slid 0.39% during European morning trade before settling at a 31-year low of 1.2786.
Research firm Markit said its U.K. construction purchasing managers' index rose to 52.3 in September from August’s reading of 49.2. Economists had expected the index to drop to 49.0 in September.
But the pound remained under broad pressure amid concerns over a ‘hard brexit’ after British Prime Minister Theresa May set a March deadline to begin the UK's formal departure process from the European Union.
Meanwhile, the greenback was boosted after the Institute for Supply Management said on Monday that its index of manufacturing activity rose to 51.5 last month from August’s reading of 49.4. Analysts had forecast a lesser increase to 50.3.
The report added to optimism over the strength of the ecnomy after Friday’s upbeat U.S. consumer sentiment data.
Market participants were also focusing on Friday’s U.S. nonfarm payrolls report for further indications on the strength of the job market, as the Federal Reserve has indicated that future interest rate decisions will be data-dependent.
Sterling was fractionally lower against the euro, with EUR/GBP up 0.09% at 0.8742.