LONDON (AFP) — The pound remained weak Wednesday, hitting 23-day lows against the euro, which came close to the 0.80 pound mark, as UK data pointed to a very bleak outlook for the UK housing and construction sectors.
The latest UK construction PMI showed activity in the sector declining at the fastest pace since the series began in 1997.
At the same time, housing equity withdrawal slumped to its lowest level since the first quarter of 2001, according to figures released by the Bank of England.
The news comes amid major concerns about the outlook for the housebuilding sector, as shares in Taylor Wimpey Plc lost more than half their value after the company announced it had failed to raise equity and will cut 900 jobs amid deteriorating conditions in the housebuilding market.
Meanwhile, the euro extended gains against the dollar, hitting a two-month high after weak US ADP jobs data, with market players looking ahead to Thursday's interest rate decision by the European Central Bank.
The ADP data -- seen as an indicator of how the closely watched non-farm payrolls figures on Thursday might look -- showed US companies shed 79,000 jobs in June, far more than had been forecast.
The news provided further excuse to sell the US dollar, with the euro bolstered ahead of what is widely expected to be a quarter point euro zone interest rate hike on Thursday.
"The prevailing short dollar bias heading into tomorrow's ECB decision helped to explain the sizable reaction to the ADP report this morning," said Michael Woolfolk at the Bank of New York Mellon.
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