LONDON: Sterling rose to a four-month high against a basket of currencies on Wednesday after some recent better UK data and before figures that are expected to show another fall in the UK claimant count unemployment.
The pound was up 0.1 percent against the dollar at $1.5663, pushing closer to last week's four-month peak of $1.5685. This helped sterling's trade-weighted index to hit a four-month high of 81.5, Bank of England data showed.
But traders said it faced stiff chart resistance at $1.5702, the 200-day moving average, with offers said around that level as well as an options barrier reported at $1.5700.
Data at 0830 GMT is expected to show the claimant count measure of unemployment falling by 5,000 in May, although wage growth is forecast to stay very weak.
In a further sign that UK economy has picked up in the second quarter, data on Tuesday showed industrial output rose in April for a third month running. This followed solid private sector activity surveys last week and dimmed the chances of more monetary easing.
"We've had some stronger data out of the UK which gives people a reason to cut back some of their short sterling positions," said Paul Robson, currency strategist at RBS.
He said the dollar may also have scope for further falls which could push the pound up towards $1.58.
In the second half of the year, however, Robson expected sterling to fall back towards the mid-$1.40s due to the combination of an improving US economy and a weak UK economy.
The pound was helped by weakness in the dollar as confidence ebbed that the Federal Reserve would soon scale back its ultra-loose monetary policy, encouraging investors to cut back their hefty bets on dollar gains.
Recent data has shown speculators built up substantial bets on gains in the dollar and falls in sterling and other major currencies, which they are now starting to trim.
Still, some analysts remained concerned that Mark Carney could opt for further monetary stimulus when he takes over as Bank of England governor next month.
The pound was steady against the euro at 85.04 pence per euro. More pound gains could lift it towards last week's peak of 84.77 pence per euro, its strongest since May 21.
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