MARKET REPORT
THE pound slid nearly 1% yesterday against the US dollar as investors cheered a strong jobs report stateside and digested the morning’s disappointing UK construction data.
Sterling was trading at around 1.412 versus the greenback – down 0.9% for the session – but was also flagging against the euro, down 0.4% at 1.134.
David Madden, a market analyst at CMC Markets UK, said: “Sterling has been in a strong upward trend versus the US dollar since March and today’s disappointing UK construction update and the robust US non-farm payrolls report saw traders quickly unwind their long positions on the pound.”
The US jobs report showed the country added 200,000 jobs in January, which was ahead of the 180,000 that economists were expecting, keeping the unemployment rate at 4.1%.
“The highlight of the report was that average earnings jumped by 2.9%, and the previous reading was revised higher to 2.7%, up from 2.5%,” Mr Madden added.
It came hours after fresh data showed Britain’s construction sector came within a whisker of stagnation last month, sliding to a fourmonth low as housebuilders endured a tough start to the year.
The Markit/CIPS UK Construction purchasing managers’ index (PMI) recorded a reading of 50.2 in January, down from 52.2 in December, with economists predicting a figure of 52.0.
A reading above 50 indicates growth.
Across Europe, Germany’s Dax was down 1.7% and the Cac 40 in France dropped 1.5%.
The price of oil took a tumble after the strong US dollar knocked back gains from the previous session.
Brent crude sank more than 2% to 68.12 a barrel.
In UK stocks, Vodafone was one of the biggest risers on the FTSE 100, up 2.38% or 5.1p at 219.5p.
The telecoms company confirmed yesterday that it is in early stage discussions regarding the acquisition of just some of Liberty Global’s European assets.
The biggest risers on the FTSE 100 Index were AstraZeneca up 150p to 5,036p, Vodafone up 5.10p to 219.5p, Admiral Group up 28.5p to 1,854p, Smurfit Kappa up 38p to 2,570p.
The biggest fallers were Glencore down 17.1p to 382.8p, Evraz down 14.6p to 364.5p, Johnson Matthey down 98p to 3,336p, International Consolidated Airlines Group down 17.2p to 629.6p.