On Tuesday the pound rose to five-month highs against the dollar
after data indicated that in March U.K. industrial output grew at the fastest rate
in half a year, easing concerns that the country's economic growth is contracting.
GBP/USD hit highs of 1.5661, the most since December 22, up from around 1.5576 ahead of the report.
The U.K. Office for National Statistics said industrial output rose 0.5% in March, the strongest increase since September and ahead of economists' forecast for an unchanged reading after a 0.1% rise in February.
A pick-up in oil and gas activity was the main reason for the increase, as oil and gas extraction rose at its fastest rate since February 2014.
Industrial output rose by 0.1% for the first quarter as a whole, compared to forecast for a 0.1% decline.
Manufacturing production climbed 0.4% after upwardly revised growth of 0.5% in February, slightly ahead of forecasts for a 0.3% increase. On a year-over-year basis, manufacturing output was just 1.1% higher, the slowest rate of growth since December 2013.
Sterling dipped against the euro, with EUR/GBP up 0.56% to 0.7196.
The euro rebounded on Tuesday as a selloff in global bond markets undermined greenback strength. German 10-year bund yields rose, narrowing the gap with their U.S. counterparts. German bund yields act as benchmarks for European financial markets and higher yields push the euro higher against the dollar.
