Investing.com - The pound rose to session highs against the dollar on Wednesday after data showed that the U.K. construction sector continued to expand at a rapid pace in March, while confidence about the 12-month outlook rose to the highest in more than seven years.
GBP/USD touched highs of 1.6664 and was last up 0.15% to 1.6652, not far from the two-week highs of 1.6682 reached on Monday.
Cable was likely to find support at 1.6617, Tuesday’s low and near-term resistance at 1.6682.
The Markit/ Chartered Institute of Purchasing & Supply U.K. construction purchasing managers' index ticked down to 62.5 last month from 62.6 in February. Economists had expected the index to rise to 63.0 in March.
Reports of improving underlying demand and more favorable business conditions helped business optimism reach its highest level since January 2007, while firms hired staff at the fastest pace in four months.
Residential construction saw the fastest rate of expansion, rebounding after weather related disruptions in February.
“As the rain gave way to sun, the housing market reclaimed its spot as the star performer. Commercial activity continued to rise strongly, benefitting from the positive business conditions,” said David Noble, senior economist at Markit.
Earlier Wednesday, U.K. mortgage lender Nationwide reported that growth in house prices slowed for the third straight month in March, despite recording their biggest annual increase in almost four years.
House prices rose 0.4% last month, the slowest pace of monthly growth since June 2013, slowing from an upwardly revised 0.7% increase in February.
On a year-over-year basis, house prices were 9.5% higher in March, after a 9.4% increase in the 12 months to February, the largest annual gain since May 2010.
Elsewhere, sterling was higher against the euro, with EUR/GBP down 0.16% to 0.8281.
The euro slipped as traders remained cautious ahead of Thursday’s European Central Bank meeting, amid growing concerns over the threat of deflation in the euro zone.