GBP/USD shot to session highs after upbeat UK manufacturing PMI data

The sterling rose sharply against the US dollar on Monday, following the release of considerably better than projected manufacturing PMI data out of the United Kingdom, while concerns over a possible military strike on Syria slightly cooled.

GBP/USD rallied to its highest point on Monday at 1.5592 at 8:29 GMT, also the pairs highest since August 26th, after which consolidation followed at 1.5578, still up by 0.52% for the day. Support was expected at current session low, 1.5505, while resistance was to be encountered at August 19th high, 1.5672.

Minutes ago Markit Economics group and the Chartered Institute of Purchasing and Supply (CIPS) reported that manufacturing PMI in the United Kingdom rose to a 30-month high in August, reaching 57.2 from a a reading of 54.8 in July, which was a revision up from 54.6 previously. Analysts had expected that the indicator will show a lesser advance to 55.0 in August. The indexes, gauging output and new orders, jumped at the fastest rate for the past two and a half years in August, giving indications that countrys manufacturing sector could maintain the tendency of strong performance at the beginning of the third quarter of this year.

Additionally, earlier today the London-based property researcher Hometrack said, that the average house prices in England and Wales rose by 0.4% in August after a 0.3% gain in July. Values advanced 1.8% in August 2013 compared to a year earlier, marking the largest gain since July 2010.

Meanwhile, fears of a possible military intervention by the United States and its allies in Syria chilled to a certain extent, as US President Barack Obama said on August 31st that he will seek Congress’s approval before embarking on a campaign in Syria. Congress is expected to only debate a Syria strike, after it returns from a summer recess on September 9th, delaying any possible response to the chemical weapon attack near Damascus. In the mean time, US Secretary of State John Kerry said in front of CNN on September 1st, that the United States had proof that poisonous sarin gas was used in the chemical attack on Syrian civilians near Damascus on August 21st.

Elsewhere, the pound was pushing higher against the euro, nearing two-month highs, as EUR/GBP cross dropped 0.59% to trade at 0.8484 at 9:10 GMT. GBP/JPY pair registered a 1.69% daily advance on Monday to trade at 154.75 at 9:10 GMT. The sterling has strengthened 6.5% during the past six months, or the best performing currency of the 10 developed-nation currencies, tracked by Bloomberg Correlation-Weighted Indexes. The euro has appreciated 4.3%, while the US dollar climbed 2.6%.