GBP/USD reaches fresh over 2-year highs following the UK PMI data

GBP/USD reached fresh 27 month highs, after the release of the UK PMI. At 09:28 on Monday, the Chartered Institute of Purchasing and Supply announced the results of its survey on manufacturing activity. The results indicated that activity in the sector expanded at the fastest pace in 33 months in November.

Having reached a session high at 1.6442 at 00:25 GMT, the highest level since August 2011, GBP/USD traded at 1.6388 at 10:57 GMT, gaining 0.10% for the day. Support was likely to be received at November 29th low, 1.6315, while resistance was to be encountered at August 29-th 2011 high, 1.6454.

The UK Manufacturing Purchasing Managers Index (PMI) rose to a value of 58.4 in November, the highest level since February 2011, compared to an upwardly revised reading of 56.5 in October. The results outstripped analysts estimates, which pointed a value of 56.2. The index is based on a survey among purchasing managers in the manufacturing sector and measures the level of activity. A reading above 50 indicates expansion in the sector, while a reading below 50 indicates contraction. The indicator is closely watched by traders, because purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

A separate report revealed that UK house prices increased in all regions in November for the first time in more than six years. Home values across England and Wales increased 0.5% from October, property researcher Hometrack revealed today.

Meanwhile, investors are awaiting the statement of Federal Reserve Chairman Ben Bernanke in Washington later in the day. At 15:00 GMT the Institute of Supply Management (ISM) is scheduled to release final data on manufacturing activity in the United States for November. ISM will probably report that its index of manufacturing activity fell to a value of 55 in November from 56.4 in the previous month, which was the highest level since April 2011, according to the median estimate of economists participated in a survey by Bloomberg.

On Friday, December 6th, the United States will release the keenly anticipated data on non-farm payrolls and rate of unemployment for November, which according to analysts’ projections will be reach 183 000 in November, after a reading of 204 000 in October.

Last month Federal Reserve minutes pointed that the Federal Reserve officials may reduce their $85 billion in monthly bond purchases “in coming months” as the economy improves.

Elsewhere, AUD/USD climbed to a daily high at 0.9168 at 7:10 GMT on Monday, after which the pair consolidated at 0.9160, gaining 0.54% for the day. Support was likely to be received at November 29th low, 0.9056, while resistance was to be encountered at November 26th high, 0.9204. The Aussie was gaining against the euro as well, with EUR/AUD cross down 0.42% on a daily basis to trade at 1.4853 at 7:50 GMT.