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    Pound rises against weaker dollar, but gains checked

    The pound moved higher against softer dollar on Thursday as doubts over a near-term U.S. rate hike hit the greenback, but sterling’s gains were held in check after disappointing U.K. construction sector data.

    GBP/USD was up 0.16% at 1.4436, holding below session highs of 1.4467.

    The pound’s gains were checked after survey data showing that the slowdown in the U.K. construction sector continued in May, amid the first drop in new orders since April 2013.

    The Market construction purchasing managers' index fell to 51.2 from April’s reading of 52.0. Economists had expected an unchanged reading.

    The report said that delay’s to client decision making ahead of the European Union membership referendum on June 23 had contributed to the slowdown.

    The dollar remained on the back foot after mixed U.S. economic reports added to doubts over whether the Federal Reserve will raise interest rates in June.

    The Institute of Supply Management said Wednesday that its manufacturing index expanded for a second month in May.

    The report came after a similar survey by research group Markit showing that U.S. factory activity slowed slightly in May, hitting the lowest level since September 2009.

    A separate report showed that U.S. construction spending posted the largest monthly decline since January 2011 in April.

    Investors were turning their attention to Friday’s U.S. nonfarm payrolls report for May for fresh indications on the strength of the labor market.

    The U.S. was to release data on ADP nonfarm payrolls and initial jobless claims later Thursday.

    U.S. central bank chief Janet Yellen said last week it could be appropriate raise rates in the coming months if the economy and the labor market continue to pick up as expected, fueling expectations for a near-term rate hike.

    The Fed hiked interest rates in December for the first time in almost a decade.

    Higher rates are positive for the dollar because they make the U.S. currency more attractive to yield-seeking investors.

    Sterling was flat against the euro, with EUR/GBP at 0.7763.


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