Forex - GBP/USD hits session highs after U.K. construction PMI

The pound hit session highs against the dollar on Thursday after data showed that the contraction in the U.K. construction sector slowed in April, but gains were checked ahead of a European Central Bank policy meeting later in the session.

GBP/USD hit 1.5579 during European morning trade, the session high; the pair subsequently consolidated at 1.5564, edging up 0.07%.

Cable was likely to find support at 1.5524, Wednesday’s low and resistance at 1.5605, Wednesday’s high and a two-and-a-half month high.

Markit said the U.K. construction purchasing managers' index rose to 49.4 from 47.2 in March, better than expectations for a reading of 48.0.

“The overall survey findings are an early indication that construction will act as less of a drag on U.K. GDP over the second quarter of 2013,” Tim Moore, senior economist at Markit said.

Investors remained cautious ahead of the ECB’s policy announcement later Thursday as speculation over a rate cut intensified after recent weak data indicated that the economic outlook for the euro zone was deteriorating.

The dollar remained under pressure after ADP nonfarm payrolls data on Wednesday showed that the U.S. private sector added 119,000 jobs in April, well below expectations for an increase of 150,000. 

A separate report showed that growth in the U.S. manufacturing sector slowed in April.

The Federal Reserve recommitted to its USD85 billion a month asset purchase program following Wednesday’s policy meeting and indicated that it could increase or decrease the monthly amount, depending on the outlook for inflation and employment.

Sterling pushed higher against the euro, with EUR/GBP sliding 0.12% to 0.8461.

The U.S. was to publish the weekly government report on initial jobless claims and official data on the trade balance later in the trading day.

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