Investing.com - The pound held steady close to three-month lows against the dollar on Wednesday after data showing that the U.K. construction sector expanded at a slightly slower-than-expected pace last month.
GBP/USD was last at 1.5291 from around 1.5299 ahead of the data, and not far from overnight lows of 1.5271, the weakest since June 9.
The Markit construction purchasing managers' index ticked up to 57.3 in August from 57.1 in July. Economists had expected the index to improve to 57.5.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
The fastest rate of expansion was in was in residential construction and commercial work also accelerated strongly, while civil engineering was the weakest area of activity.
Hiring continued at a rapid pace the report said, and lower oil contributed to the weakest overall rate of cost inflation for four months.
“U.K. construction companies remained on a reasonably strong growth footing in August, helped by a sustained recovery in both residential and commercial building activity," Tim Moore, an economist at survey compiler Markit, said.
The report came one day after a similar survey showed that growth in the U.K. manufacturing sector slowed last month, dampening the outlook for third quarter growth.
Sterling remained weaker against the single currency, with EUR/GBP down 0.29% to 0.7372, little changed from before the report.
The euro came under pressure as global stock markets stabilized and risk aversion eased, bolstering dollar demand.
The worsening outlook for equities has underpinned demand for the low yielding euro and yen in recent sessions.
Investors often use low-yielding currencies to fund positions in higher-yielding currencies and equities, known as carry trading.
The dollar remained on the defensive amid ongoing uncertainty over whether the recent turmoil in global financial markets will prompt the Federal Reserve to delay hiking short-term interest rates.
Investors were looking ahead to Friday’s U.S. jobs report for August, which could help to provide clarity on the likelihood of a near-term interest rate hike.
The U.S. was to release a report on private sector jobs growth later Wednesday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.18% to 95.56, holding above the eight-month trough of 92.52 set last Monday.