The pound held gains against the dollar on Monday after data showing that U.K. factory activity grew at the fastest rate in three months in January, pointing to a modest improvement at the start of 2016.
Markit said that its U.K. manufacturing purchasing managers’ index rose to 52.9 from December’s 52.1, compared to expectations for a down-tick to 51.8.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
“Subdued growth, rising global headwinds and a lack of inflationary pressure provide further cause for the Bank of England to push its first rate increase into the back and beyond of 2016,” Rob Dobson, senior economist at survey compiler Markit said.
Meanwhile the U.S dollar extended losses against the other major currencies on Monday as well, after data showed that manufacturing activity in the U.S. contracted again in January, holding near levels not seen since July 2009.
The Institute for Supply Management said its index of purchasing managers inched up to 48.2 last month from a reading of 48.0 in December. Analysts had expected the manufacturing PMI to rise to 48.1 in January.
Intra-day bias remains on the upside as 21 and 55 EMA is crossed upward on the 1 hour charts with SSRC oscillator signalling more bullish momentum is expected in the pair. More rise could be seen to 1.4529 weekly resistance.
Later today, investors would be taking a close look at the GBP Construction PMI on Tuesday Febrauary 2, 2016 to determine if more long positions could be added to the pair.