Investing.com - The pound dipped to session lows on Tuesday after data showed that growth in the U.K. construction sector lost momentum in April as uncertainty ahead of the upcoming general elections on Thursday weighed.
GBP/USD touched session lows of 1.5088 immediately following the release of the data, before pulling back to 1.5118.
Research firm Markit said the construction purchasing managers’ index fell to 54.2 from 57.8 in March. Economists had expected a more modest slowdown to 57.5. It was the slowest rate of expansion in 22 months.
A reading below 50.0 indicates activity is declining, while a reading above that level implies it is increasing.
There were indications that construction firms delayed spending decisions ahead of the May 7 election the report said, but job creation in the sector remained robust.
Business confidence regarding the 12-month outlook eased back from the nine-year high seen in March, but remained strong.
The report came after data last week showing similar weakness in the U.K. manufacturing sector last month and another report showing that economic growth in the U.K. slowed sharply in the first quarter of the year.
Investors were looking ahead to survey data on Britain’s dominant service sector on Wednesday for an indication of the economic outlook at the start of the second quarter.
Investors were also watching the outcome of Thursday’s parliamentary elections, which were widely expected to result in a hung parliament and an unstable coalition government.
Elsewhere, sterling was higher against the euro, with EUR/GBP down 0.42% to 0.7338.
The greenback remained supported after recent economic reports indicated that the U.S. recovery had turned a corner after a recent bout of weakness.
The dollar has weakened in recent weeks after disappointing data prompted investors to delay expectations on the timing of an initial rate hike by the Federal Reserve.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.30% to 95.88, recovering from a two-month low of 94.47 set last Thursday.