Investing.com - The pound rose against the U.S. dollar on Tuesday, boosted by upbeat U.K. construction activity data, while demand for the greenback slightly weakened as market participants locked in profits from its recent rally.
GBP/USD hit 1.5240 during European morning trade, the session high; the pair subsequently consolidated at 1.5244, rising 0.28%.
Cable was likely to find support at 1.5161, the low of May 7 and resistance at 1.5345, the high of May 29.
In a report, market research firm Markit and the Chartered Institute of Purchasing & Supply said that their U.K. construction purchasing managers' index rose to 55.9 last month from a reading of 54.2 in April. Economists had expected the index to improve to 55.0 in May.
Commenting on the report, Tim Moore, senior economist at Markit and author the report, said, "May’s survey provides the first sign of a post-election bounce in the U.K. construction sector. With a sustained period of policy uncertainty no longer on the horizon, business confidence surged back to its highest level since early-2006."
However, sentiment on the pound remained fragile amid renewed concerns over a possible British exit from the European Union.
Prime Minister David Cameron’s government introduced a law in parliament on Thursday to ensure a U.K. referendum on EU membership will be held by the end of 2017.
The dollar had strengthened broadly after data on Monday showed that the Institute of Supply Management's index of manufacturing activity was 52.8, up from 51.5 in April and ahead of forecasts for 52.0.
Another report showed that U.S. construction spending rose to the highest level in six-and-a-half years in April, adding to recent signs that the economy is rebounding from a weak first quarter.
The Commerce Department said construction spending jumped 2.2% to an annual rate of $1.0 trillion, the highest since November 2008.
Sterling was lower against the euro, with EUR/GBP edging up 0.13% to 0.7198.
In the euro zone, Germany's Federal Statistics Office said the number of unemployed people fell by 6,000 last month, compared to expectations for a drop of 10,000.
The report showed that Germany’s unemployment held steady at 6.4% in May, in line with expectations and unchanged from April.
But investors remained cautious after Greece's creditors said late Monday that there must be "intensive work" in the coming days to reach an agreement on economic reforms needed to unlock further financial aid.
Greece is due to make a €305 million payment to the International Monetary Fund on Friday but warned last month that it will be unable to make the repayment if a cash-for-reforms deal is not reached by then.