Pound Rises As U.K. PMI Hits 7-month High

The British pound strengthened against most major currencies in the early European session on Monday, after data showed that the British manufacturing activity was the strongest in seven months during February.

Data from Markit economics showed that the seasonally adjusted Markit/CIPS Purchasing Manager's Index for the manufacturing sector climbed to 54.1 in February. Economists had forecast a score of 53.3. January's reading was revised up to 53.1 from 53.

In other economic news, data from the Bank of England showed that U.K. 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.

Consumer credit increased by GBP 0.8 billion from December, faster than a GBP 0.5 billion rise seen a month ago. It was forecast to grow by GBP 1 billion. The annual growth in secured lending remained unchanged at 1.8 percent and consumer credit growth improved marginally to 6.7 percent from 6.6 percent.

Meanwhile, M4 money supply declined 0.8 percent month-on-month in January, reversing a 0.1 percent rise in December. This was the first fall in three months. On a yearly basis, M4 declined at faster pace of 2.2 percent after decreasing 1.1 percent in the prior month.

In the Asian trading, the pound held steady against other major currencies.

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 U.S. 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 U.S. dollar and 188.06 against the yen.

Looking ahead, U.S. personal income and spending data for January and Canada current account for fourth-quarter are set to be published in the New York session.