Investing.com - The pound rose against the U.S. dollar on Tuesday, despite the release of downbeat U.K. construction activity data, as lower expectations for a U.S. rate hike this year and downbeat U.S. data continued to weigh broadly on the greenback.
GBP/USD hit 1.3238 during European morning trade, the session high; the pair subsequently consolidated at 1.3218, gaining 0.33%.
Cable was likely to find support at 1.3070, the low of July 27 and resistance at 1.3305, the high of July 29.
Research firm Markit and the Chartered Institute of Purchasing & Supply (CIPS) said their U.K. construction purchasing managers' index fell to 45.9 in July from the previous month’s reading of 46.0.
Economists had expected the index to drop to 43.8 in last month.
The data came a day after Markit said its U.K. manufacturing PMI fell to 48.2 last month from a reading of 52.1 in June. It was the lowest level since early 2013 and worse than a preliminary report released on July 22 that had shown a drop to 49.1 in July.
The dowbeat data added to concerns over the strength of the U.K. economy and fueled further expectations for a rate cut by the Bank of England at its policy meeting this week.
Meanwhile, sentiment on the greenback remained fragile after the advance read on second quarter U.S. gross domestic product showed on Friday a 1.2% annualized growth rate, well below expectations for 2.6%.
The disappointing data lessened expectations for an early interest rate rise from the Federal Reserve.
Sterling was steady against the euro, with EUR/GBP at 0.8470.