The pound extended gains against the other major currencies in early European deals on Monday, as the U.K. manufacturing activity grew much stronger-than-expected to a 16-month high in October.
Survey data from Chartered Institute of Procurement and Supply and Markit showed that the headline seasonally adjusted Purchasing Manager’s Index rose to 55.5 in October, from the upwardly revised figure of 51.8 posted in September. Economists had been expecting a reading of 51.3.
October saw solid improvements in the rates of growth in output and new orders, with output growth fastest since June 2014, the data showed.
The European markets are mostly higher, as Eurozone factory activity expanded faster than anticipated in October. The data lifted hopes that Eurozone has not so far been significantly hit by weak growth in China and emerging markets.
The pound showed mixed performance in the Asian session. While the pound held steady against the greenback and the franc, it edged down against the yen and the euro.
In European trades, the pound firmed to 186.97 against the Japanese yen, a level unseen since September 22. This is a 0.52 percent increase from last week’s closing value of 186.00. The pound-yen pair is likely to find resistance around the 188.00 zone.
The pound appreciated to 2-1/2-month highs of 1.5314 against the Swiss franc and 0.7107 against the euro, from Friday’s closing values of 1.5227 and 0.7128, respectively. Continuation of the pound’s uptrend may take it to resistance levels of around 1.545 against the franc and 0.70 against the euro.
The pound, which ended Friday’s trading at 1.5421 against the greenback, strengthened to near a 2-week high of 1.5497. The pound is seen finding resistance around the 1.555 mark.
Looking ahead, U.S manufacturing PMI reports for October and U.S. construction spending data for September are slated for release in the New York session.
At 12:00 pm ET, Federal Reserve Bank of San Francisco President John Williams will deliver opening remarks at the San Francisco Federal Reserve event.
The material has been provided by InstaForex Company – www.instaforex.com