LONDON: Sterling jumped 1 percent against the euro to hit a one-month high and traded above $1.32 against the dollar on Thursday, after data showed the British manufacturing sector staged one of its sharpest rebounds on record in August.
The Markit/CIPS Purchasing Managers' Index (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 in July hit after Britain's June 23 vote to leave the European Union.
The headline rise from July matched the biggest month-on-month increase in the near 25 years of the survey, Markit said.
Sterling rose 0.9 percent to $1.3250, from $1.3152 beforehand while the euro fell to 84.125 pence per euro , down from 84.68 pence before the survey was released.
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 June's Brexit vote.
A sell-off in euro zone government bonds gathered pace after the British data, with Germany's benchmark 10-year bond yield up 3 basis points at minus 0.036 percent. The British 10-year gilt yield also rose to hit its highest level in a month.
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