Pound up as FTSE gains over 2%

The pound strengthened by 0.17 cents (0.10%) against the US dollar yesterday, finishing the day at $1.6478.

• In early trading yesterday, sterling strengthened against the greenback after better-than-expected UK manufacturing PMI data buoyed demand for the UK currency. The index rose to 47.0 in June from 45.4 in May, the highest it has been since May 2008.
  
• Strong gains on London equity markets also helped the pound’s cause as they started the third quarter positively. The FTSE 100 eventually finished up 91.50 (2.15%).
  
• However, the news that US private employers cut 473k jobs in June capped demand for the riskier pound early yesterday afternoon. The figure was more than expected but less than the 485k jobs lost in May. US pending home sales data also came in worse-than-forecast, but American manufacturing PMI figures were ahead of predictions at 44.8. These also had an effect on the pound’s performance in late trading.
  
• In trading so far today, the pound has weakened against the greenback as traders eye important US Non-Farms data at 13.30 BST. There are no major announcements due in the UK today.