Investing.com - The pound pushed higher against the broadly weaker dollar on Wednesday as concerns over the prospect of a win for Donald Trump in next week’s U.S. presidential election hit the greenback.
GBP/USD climbed 0.22% to 1.2270, up from Tuesday’s close of 1.2243.
Polls on Tuesday indicated an increasingly uncertain outcome for the U.S. presidential election, spurring a flight to safety in global financial markets.
Trump’s odds for winning the U.S. elections increased after the FBI reopened its investigation into Hillary Clinton’s use of a private server.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.24% to 97.52, the lowest level since October 13.
Sterling’s gains were held in check after ratings agency Moody’s warned that it could downgrade Britain’s credit rating if Brexit causes UK companies to lose access to the EU single market.
Moody’s currently rates the UK as Aa1 after a downgrade on June 24, in the immediate aftermath of the EU referendum.
But sterling received a boost after data showing that British construction activity increased at the fastest rate since March last month.
Financial data company Markit said its construction purchasing managers’ index rose to 52.6 in October from September’s 52.3.
Economists had expected the index to tick down to 51.8.
New order volumes picked up, but the rate of growth eased since September and remained weaker than seen prior to this summer.
Soaring prices for building materials also clouded the outlook, Markit said.
The report came a day after a similar survey of the manufacturing sector showed that the slump in the pound since the Brexit vote lead to one of the fastest rises in average costs for raw materials in the 25-year survey history, which is likely to feed through to shop prices.
Meanwhile, sterling was little changed against the euro, with EUR/GBP at 0.9034.