**Sterling has risen to a 10-month high against the dollar after upbeat data on the UK manufacturing sector underscored hopes of an economic recovery.**The pound rose as high as $1.6850 against the dollar - its highest level since mid-October. It also hit a one-month high against the euro.
A survey of the manufacturing sector showed the sector expanding for the first time in more than a year.
The pound has also benefited from recent weakness in the dollar.
UK manufacturing activity rose last month for the first time since March 2008, as new orders came in, according to a survey by the Chartered Institute of Purchasing and Supply (CIPS) and Markit.
“The manufacturing sector has clearly pulled out of the nosedive it was in earlier this year and is no longer plummeting,” said David Noble, chief executive of CIPS.
Bounce
While still a long way below the $2 levels seen in July last year, the pound has rebounded 25% from the 23-year low of $1.35 it hit in January this year.
Meanwhile, the US currency has suffered as signs of a global economic recovery have encouraged investors to move their money out of dollars and into riskier assets.
The dollar is trading near its lowest levels this year when measured against a group of major currencies.