Sterling rose to a four-week high against the dollar on Friday in its longest rally since the Brexit vote as weak US jobs data weighed on the dollar.
The pound, which rose by a cent against the dollar to $1.3352 on Friday, has now posted three consecutive weekly rises against the greenback, while the FTSE 100 in London was on track for its biggest daily gain since June 30.
Sterling was steady after the better-than-expected construction data showed activity bounced back from a seven year low last month, while companies started to hire again.
The Markit/CIPS construction purchasing managers' index (PMI) rose to 49.2 in August, from 45.9 in July.
Markit said business activity only fell "marginally" in August, with all three sub-sectors, including house building and commercial activity, recording improvements.
The survey compiler said new order volumes "moved closer to stabilisation" in August.
However, it said uncertainty had "dampened demand and slowed progress on planned developments", particularly in relation to large projects.
Tim Moore, senior economist at Markit, said the data suggested there had been a "nascent recovery in client confidence" since the decision to leave the EU.
It follows manufacturing data this week that showed activity climbed to an 11-month high last month following a steep downturn in the wake of the referendum result.
“Despite another month of reduced output, the latest figures can be viewed as welcome news overall after a challenging summer for the construction sector," he said.
"The move towards stabilisation chimes with the more upbeat UK manufacturing PMI data for August, and provides hope that the near-term fallout from Brexit uncertainty will prove less severe than feared."
Source: Daily Telepgraph