Investing.com - The pound rose to fresh multi-year highs against the dollar and the euro on Wednesday after data showed that the U.K. construction sector expanded at the fastest rate in four months in June, adding to optimism over the economic recovery.
GBP/USD was up 0.13% to 1.7171, the highest since October 2008, from 1.7144 ahead of the data.
Cable was likely to find support at 1.7150 and resistance at 1.7250.
The Markit U.K. construction purchasing managers’ index rose to 62.6 in June from 60.0 in May, the highest reading since February. The consensus forecast had been for a decline to 59.5.
Construction firms reported that they are hiring staff at the fastest rate since the survey began in 1997.
Growth was fastest in the home building sector the report said, while commercial building construction also picked up and civil engineering growth slowed.
The report came one day after data showed that the U.K. manufacturing sectors expanded more rapidly than forecast in June.
The upbeat reports indicated that the U.K. economy continued to grow at a strong pace in the second quarter, fuelling expectations that the deepening recovery will prompt the Bank of England to raise interest rates before then end of this year.
The dollar remained under pressure as investors turned their attention to the U.S. nonfarm payrolls report, due to be released one day early on Thursday ahead of the Independence Day holiday, for further indications on the strength of the economic recovery.
The greenback has come under pressure since data last week showing a 2.9% economic contraction in the first quarter bolstered expectations that the Federal Reserve will keep rates on hold for an extended period.
The euro fell to fresh 20-month lows against sterling, with EUR/GBP down 0.22% to 0.7958, the weakest since October 2013.
Sentiment on the euro was hit by concerns that the European Central Bank could voice concerns over the currency’s strength at its post-policy meeting press conference on Thursday, amid fears over persistently low levels of inflation in the euro zone.