Sterling loses ground against the dollar as further Euro-zone issues cause investors to head back to the safe-haven dollar.

After yesterdays poor UK manufacturing data there was some positive news for the pound on Wednesday, UK construction data released in the morning was better than expected, however, with euro-zone unemployment rising and the manufacturing sector contracting it meant the GBP/USD cross fell below $1.62.

The data led to the pound/euro rate to push towards a 22 month high, but as the dollar is seen as a safe haven for investors pound/dollar rates suffered. Euro-zone jobless rates reached a record high as 17.4 million people are now looking for work.

UK construction slowed in April from the 21 month high we saw in March, the construction purchasing managers’ index fell to 55.8 from 56.7. Although the data release showed the sector has slowed down it is still growth and that leant support to the pound along with the news UK mortgage approvals came in higher than expected.

Even with positive news coming from the UK, today has shown just how fragile the markets can be and how the euro-zone can play such a big part in dollar exchange rates. As I have said before it is impossible to predict which way the market will move but there are tools available to you so that you can protect yourself from adverse movements. To discuss these in more detail click here to send me a direct email or complete the contact form on the homepage of the blog.