The GBP/USD hit a one-month high and traded above 1.3200 today, after data showing the British manufacturing sector staged one of its sharpest rebounds on record in August.
British manufacturing PMI, a closely watched gauge of factory activity, jumped to a 10-month high of 53.3 in August, recovering from the three-year low it hit in July after Britain's June 23 vote to leave the European Union.
Sterling has performed reasonably well in the past few weeks, helped by better-than-expected data that has taken the edge off concerns about a sharp decline in economic activity following the shock Brexit vote.
Surveys this week showing improved consumer confidence and a rise in British house prices in August have added to signs the economy is holding up well.
We think that a series of strong macroeconomic data will be enough to stop the BoE from further monetary easing. The Bank of England cut interest rates and restarted bond purchases in August and announce further easing. In our opinion this action was a sign of panic after Britain's vote to exit the European Union and was not justified from the macroeconomic point of view.
Our EUR/GBP short was closed with profit at 0.8450 today. We are looking to sell EUR/GBP again at 0.8540.
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