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The British pound's free fall through July has been arrested as concerns about the strength of the US job market weakened the greenback even as the market awaited clearer policy signals from the Bank of England at the 7 August policy review.

Despite being lower than the previous number, the above-consensus reading of July construction PMI, as per the data on Monday, also helped the pound to find a support near the seven-week low it touched against the dollar on Friday.

The index came in at 62.4 from 62.6 in June, but topping analysts' estimate of 62.0.

"Strong output growth was sustained across the UK construction sector during July, although the pace of expansion moderated slightly from the four- month high recorded in June," a Markit press release said.

The GBP/USD rose to 1.6837 from the previous close of 1.6822, and compared to 1.6813, its lowest since 12 June touched on Friday.

The sterling ended July 1.3% down against the dollar, after having touched a near six-year high of 1.7192 earlier in the month.

It continued lower on 1 August despite the weakness in the dollar as data showed the Markit manufacturing PMI fell more than expected in July.

And with the BoE scheduled to review monetary policy later this week, the market has more reasons to stay on the sidelines.

The British central bank is widely expected to keep the bank rate at 0.5% and the asset purchase target unchanged at £375bn.

But as the UK data after the last policy decision on 10 July were largely on the positive side, the statement will be watched for any reiteration of the hawkish elements of the bank's recent remarks.

GDP growth for second quarter came in at 3.1%, higher than the Q1 growth of 3%, and consumer price inflation quickened to 1.9% from a year ago from 1.5% in May, topping a consensus of 1.6%.

At the same time, retail sales growth slowed to 3.6% year-on-year in June from 3.7% while analysts were expecting a rise to 3.9%.

The June industrial output and NIESR GDP estimate for the three months to July are the two important UK indicators left ahead of the review.

Technical Outlook

The GBP/USD is now testing the key support line of 1.6824 and a break below that will take it to 1.6693 ahead of 1.6583.

On the higher side, the pair has its first target at 1.6942 ahead of the more important 1.6998, a break above which will expose the July peak of 1.7192.