Pound Rises On Upbeat U.K. PMI Data

(RTTNews) - The British pound strengthened against other major currencies in the European session on Tuesday, after a survey showed that U.K. private sector activity expanded for the sixth consecutive month in April.

The composite output index rose from 52.8 to 54.0, hitting an 11-month high.

The services PMI climbed to 54.9 in April from 53.1 in March, hitting a 11-month high.

Meanwhile, the manufacturing PMI fell to a two-month low of 48.7 in April from 50.3 in March.

Meanwhile, the U.K. public sector net borrowing declined in the financial year ending March, but it remained well above the official estimate, separate data from the Office for National Statistics showed.

European stocks traded higher after a survey showed that business activity in the euro zone expanded at its fastest pace in nearly a year this month.

The composite PMI increased from 50.3 to 51.4 in April on the back of a buoyant recovery in the bloc's dominant service sector.

Expectations of interest rate cuts by the European Central Bank and the Bank of England also helped underpin investor sentiment.

The British sterling held steady against its major rivals in the Asian trading today.

In the European trading now, the pound rose to a 4-day high of 191.82 against the yen, from an early low of 190.83. The pound may test resistance near the 194.00 region.

Against the Swiss franc, the U.S. dollar and the euro, the pound edged up to 1.1286, 1.2389 and 0.8622 from early lows of 1.1252, 1.2330 and 0.8645, respectively. If the pound extends its uptrend, it is likely to find resistance around 1.15 against the franc, 1.27 against the greenback and 0.84 against the euro.

Looking ahead, U.S. building permits for March, U.S. Redbook report, U.S. flash PMI data for April, U.S. new home sales data for March and U.S. Richmond Fed manufacturing index for April are slated for release in the New York session.