The pound edged higher against the euro yesterday, buoyed by strong equity prices

Sterling made up over half a cent on the single currency, erasing losses incurred at the beginning of the week, to close marginally above 1.10.

• In early trading, a Nationwide survey revealed that UK house prices are continuing rise, increasing by a further 0.5% in November, which boosted demand for the pound and offset weaker manufacturing PMI data.
  
• UK house prices have now risen for the seventh consecutive month, helped by better-than-expected news from the job market.
  
• The UK manufacturing purchasing managers' index fell to 51.8 in November, some way below both the market forecast of 54.0 and the previous month's revised figure of 53.4.
  
• Sterling came under pressure on the data, but analysts said that a general move towards risk as global equity markets surged, led to an appreciation of sterling.
  
• In addition, although the manufacturing figure was weaker-than-expected, it still shows that the industry is expanding, encouraging the consensus that the UK pulled out of recession this quarter.
  
• So far today the pound is trading slightly lower although the pair are likely to remain relatively range bound, hovering around 1.10, as there are no major economic announcements in either the eurozone or the UK.