Positive UK data is good for GBP
Following the upbeat manufacturing data on Monday, the outlook for the UK took a further positive step as the construction sector retuned to growth after six months of contraction. In the March 2013 budget, the government announced measures to support consumers looking to buy their first home and to encourage the construction of new properties. The detail of the report reveals house building in May rose at its fastest pace in over two years.
A further boost for the UK came from the high street as the British Retail Consortium reported improved sales in May as temporary discounts attracted increased sales of furniture and flooring.
In the US, the trade deficit widened in April from a three year low in the previous month following increased imports of consumer goods. The trade gap grew by 8.5% to $40.2 bn, up from $37.1 bn. Demand for overseas cars and electronics goods eased concerns of a slowdown in domestic consumer spending.
As a result GBP/USD managed to consolidate on recent gains hitting a high of $1.5342 following the positive retail sales and construction data.
GBP/EUR remains stuck around the 1.1700 mark although the positive UK data has pushed it a fraction higher.