In a quiet European trading session the pound rose versus the major currencies as traders await US private payroll numbers later today.
Traders have been sending strong bids for the pound in the morning hours as the currency has outperformed all other rivals during the European trading session. Fueling the buying was better than expected British Construction PMI numbers. Sentiment for January increased to 53.7 from 49.1. A reading above 50 represents the expansion of industry. Below 50 indicates a contraction of industry.
The stronger than expected PMI data may confirm what many traders are expressing with their buying of the pound; rising inflation will force the BOE to raise interest rates sooner than expected.
At lunchtime in London, the GBP/USD was trading higher at 1.6210, after opening the day at 1.6160. The EUR/GBP was trading down at 0.8515 following an opening day price of 0.8569. The GBP/JPY was up at 132.17 from 1.31.65.
Commodities were trading near their opening day prices while European bourses were also trading even with Germany's DAX up marginally by 0.05%.
Traders will now shift their focus this afternoon to the release of the ADP Non-Farm Payrolls due out at 15:15 today. Economists expect an additional 148k new jobs were added to the US economy in the month of January.
The pound's gains could continue into the New York trading session. Support for the GBP/USD comes in at 1.6050. Resistance is found at the 2010 November high of 1.6300.
