Sterling rose to its highest in a month against a basket of currencies on Thursday as a weaker-than-expected manufacturing survey did little to dent cautious optimism about the UK economy. Traders said the pound was also lifted by demand from UK companies for hedging purposes and Asian real money investors. Sterling's trade-weighted index rose as high as 84.3, BoE data showed, as the UK currency hit a two-week peak against the dollar and came close to a one-month high versus the euro.
Sterling rose as high as $1.6176 against the dollar, its highest level since October 17, before easing back to last trade at $1.6140. A rise above $1.6178 would mark the pound's highest in nearly a month. The euro was down 0.15 percent at 80.19 pence, having earlier dropped to 80.04 pence, just above last week's trough of 80.02.
"It is possible that some investors and traders are taking some mild encouragement from the recent economic data, with stronger third quarter GDP and better (housing) data, although PMIs could suggest we are treading on water," said Michael Derks chief strategist at FxPro.