On Monday the British currency rose versus its US counterpart, after new data indicated that UK manufacturing activity expanded at the fastest
rate in seven months in February. At the same time, demand for the greenback was underpinned after Friday's US growth report.
In the European trading today, the pound rose to a 4-day high of 1.4753 against the Swiss franc, from an early low of 1.4680. The pound may test resistance near the 1.56 region.
Against the US dollar and the yen, the pound edged up to 1.5428 and 184.90 from early lows of 1.5384 and 184.36, respectively. If the pound extends its uptrend, it is likely to find resistance around 1.58 against the US dollar and 188.06 against the yen.
In a report, market research group Markit said that its U.K. manufacturing purchasing managers' index rose to 54.1 last month from a reading of 53.1 in January. Analysts had expected the index to inch up to 53.4 in February.
The Nationwide Building Society said earlier Monday that U.K. house prices fell 0.1% last month, compared to expectations for a 0.3% rise, after an increase of 0.3% in January.
U.K. house prices climbed at a rate of 5.7% in Febuary, disappointing expectations for a 6.1% gain, after a 6.8% increase the previous month.
In other economic news, data from the Bank of England showed that UK
mortgage approvals increased to a 4-month high in January. The number of
approved housing loans increased to 60,786 in January from 60,349 in
the prior month. This was the highest since September but below the
expected level of 61,000, says Alliance News.
In the meantime, the dollar remained supported after the Commerce Department reported on Friday that U.S. gross domestic product grew at an annual rate of 2.2% in the last three months of 2014, down from an initial estimate of 2.6% but ahead of expectations for a downward revision to 2.1% growth.
The February reading of the University of Michigan's consumer sentiment index, which was revised up to 95.4 from the preliminary reading of 93.6, was also supportive for the dollar. While this was down from the previous months final reading of 98.1, it was still the second highest level since January 2007.
In the euro zone, Markit said the bloc's manufacturing PMI fell to 51.0 last month from 51.1 in January. Analysts had expected the index to remain unchanged in February.
Later in the day, the Institute of Supply Management was to report on U.S. manufacturing activity.
