Pound Hits Highest Mark in Four Years against the Dollar on Strong U.K. Manufacturing Report

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Pound Hits Highest Mark in Four Years against the Dollar on Strong U.K. Manufacturing ReportThe sterling rose to a four-year high versus the U.S. dollar after an index of U.K. manufacturing activity in April beat market expectations.

The pound was also boosted by another report that indicated that yearly house-price growth rose the steepest since the onset of the global economic recession.

The pound was 0.2 percent up at $1.6900 as of 4:51 p.m. in London after earlier surging to $1.6920, the most since August 2009. The pound has advanced 0.5 percent in the last five days. The pound also rose 0.2 percent to 82.05 pence a euro.

A measure of manufacturing production that is based on a poll of purchasing managers rose to 57.3 in April, the most since November, up from 55.8 the previous month. This exceeded the median estimate of 55.4 in a Bloomberg survey of economists. A measure past 50 shows expansion.

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“It’s another strong data point,” John Hardy, a Copenhagen-based head of foreign-exchange strategy at Saxo Bank A/S told Bloomberg. “We saw a breakout yesterday where sterling closed above those highest levels, finally getting clear of the $1.6820 area, so it’s open fields from here.”

U.K. house values rose 1.2 percent from March to stand at 183,577 pounds, reported the Nationwide Building Society. Home prices advanced 10.9 percent from a year ago, the most since June 2007.

The pound has so far gained 5.7 percent, making it the best performing currency of the 10 advanced-economy currencies analyzed by Bloomberg Correlation-Weighted Indexes. The dollar has plunged 1.1 percent, while the euro has increased 2 percent.

A separate report by the Bank of England indicated that approvals for mortgages fell unexpectedly in March. Banks advanced 67,135 loans to enable consumers to buy homes, down from 69,592 in February. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com