British pound sterling soars to 11-month high against the U.S. dollar

British Pound on first day of 2017

Tuesday, supported by a data that shows a recovery of a United Kingdom factory from a seven-month low in July that eased concerns about the country’s economic slowdown; the British pound sterling ascended and rose to its highest level against the greenback. British pound sterling went as high as $1.3240 GBP=D3, which is considered as the currency’s highest level against the U.S. dollar since mid-September of 2016.

In accordance to this, PMI or the Purchasing Manager’s Index survey for Britain’s manufacturing sector have boosted to 55.1, which exceeds the 54.4 consensus and is helped by the biggest arrival of new export orders that began since 2010. In addition, this data should encourage the Bank of England’s policymakers, as the BoE will make a policy decision and release its quarterly Inflation Report on Thursday.

However, BNP Paribas currency strategist: Sam Lynton-Brown said that the latest numbers were not enough to substantially change the outlook for sterling or for the Bank of England. Sam Lynton-Brown said that the data was slightly better than expected, although it should not mean much for the British pound, especially this week—as they are preparing for the quarterly Inflation Report, which is due on Thursday. Sam Lynton-Brown also added that aside from the fact that these numbers were only a moderate upside surprise, there is no doubt that the manufacturing sector is just a small contributor in comparison with services to the growth outlook, thus, it is not that important for the BoE.

On the other hand, the British pound sterling gained 0.3% against the euro and traded at 89.35 pence. However, this number was less than a cent away compared from last week’s low.

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