The Pound Accelerates against the Euro on Strong U.K. Manufacturing Data

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The Pound Accelerates against the Euro on Strong U.K. Manufacturing DataThe pound rose against the euro for the first time in seven days after data showed that U.K. manufacturing output rose for the 15th straight month in May.

The British currency rose 0.2 percent to trade at 81.25 pence by 1 p.m. in London after earlier tumbling 0.5 percent in the past six days. The pound remained slightly unchanged at $1.6748 after earlier surging 0.3 percent in the last two trading sessions.

Markit Economics reported that its manufacturing index, which is based on a poll of purchasing managers, stood at 57 in May, down from April’s reading of 57.3. Nonetheless, the measure was still above the 50 mark that separates growth from contraction.

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“The pound has further to gain,” Eimear Daly, a London-based head of market analysis at Monex Europe Ltd told Bloomberg. “The market is crowded with long sterling positions and any weakness in data will encourage some profit taking, but that doesn’t change our view that the U.K. has a robust economic recovery and that the Bank of England will probably be the first major central bank to raise rates.”

The pound remained unmoved versus the dollar after another report released today showed that U.K. mortgage approvals declined to a 9-month low. The approvals slid to 62,918 in April, down from 66,562 in March, reported the Bank of England. This was the third straight monthly plunge after touching the highest level in six years in January. The BOE’s data also revealed that loans to businesses declined 2.4 billion pounds ($4 billion) in April.

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