Sterling jumped to a new 4-1/2 month high against the dollar after better-than-expected U.K. manufacturing PMI.
The March PMI survey released around 08:28 GMT came in at a ten-month high of 52.1, which beat forecasts of a 50.7 result. Meanwhile, February’s number was revised up to 51.5 from 51.2. Any number above 50 denotes expansion, and below 50 is contraction.
The strong manufacturing numbers gave more credibility to the recent gains in the British pound, which has been rallying since last week against a weaker dollar.
GBPUSD jumped to 1.6060 after the data from 1.6040 where it was trading just before the data.
The data show that March rounded off a positive start to 2012 for UK manufacturing. Output and new orders expanded throughout the opening quarter, with rates of increase ticking higher at the end of Q1.
The PMI data are compiled by Markit and is a survey of about 600 purchasing managers , which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.